My thoughts on the increase of volatility in the Stock Market.

A great deal of volatility is driven by uncertainty, whenever investors are tentative they will have a greater propensity to sell and buy stocks indiscriminately without consideration to fundamental value approaches. Following on this line of thought , secondary investors , driven by technical factors, will react to that initial trading and compound the increase in volatility.

The advent of high frequency, algorithmic and day trading serves to exacerbate this increase in volatility. One could argue that the domestic stock market was already overvalued . Price earnings ratios were inflated by low interest rates and central bank influence. Valuation was more driven by these factors as opposed to sustainable earnings growth. A catalyst such as the Corona Pandemic can serve as a tipping point in this case, causing markets to adjust to traditional value metrics.

Finally, many retirees were supplementing their Government payments with stock market speculation. Traditionally, retirement planning consisted of long-term stock investing in ones' earning years that transitioned to interest bearing investing for steady and safe cash flow. This may not be the case. Fixed income investors may now be panicking out of stock investments causing an increase in volatility.