Tallahassee Journal

Investors brace for wild ride in 2015

Investors brace for wild ride in 2015

One of the major investment themes for 2015 outlined by stock gurus was that investors should brace for more volatility. In Wall Street-speak, volatility is a code word for wild price swings that can spark panic in the most seasoned stock investor.stock_market_01

And, boy, has that prognostication come to fruition in the first full trading week of the new year. The Dow Jones industrial average has been the poster child for stock market volatility. Last week, the Dow took investors on a wild ride normally associated with the heart-stopping roller coasters made famous by Six Flags.

This past week, the Dow moved up or down more than 100 points in all five sessions. The blue-chip stock gauge started off the week in free fall. It plunged 331 points Monday. And nosedived 130 points Tuesday. But then the Dow did an unexpected 180-degree turn. It zoomed 213 points higher Wednesday. Then leaped 323 points Thursday, completely wiping out the massive losses from the two-day dive earlier in the week. Finally, on Friday, it dived  again. This time tumbling 170.50 points to end a wild week in the red.

Get used to it. This week’s wild swings are foreshadowing things to come, says Kate Warne, investment strategist at Edward Jones. Roller coaster-type point swings could be the norm — not the exception in 2015. Expect a “zig-zag stock market,” she warns. Adds Paul Nolte, a portfolio manager at Kingsview Asset Management; “If the old Wall Street saw is true that the first week of the year is indicative of the year as a whole, it will be a wild ride.”

The Dow’s five straight days of triple-digit moves was its first such bout of volatility of that magnitude since early October. In pre-market trading Monday, the Dow is setting up for another day of sizable moves. Around 7:30 a.m. ET, or two hours before the opening bell, Dow futures were up 87 points, or 0.5%. Wall Street is bracing for the start of the fourth-quarter earnings season, which unofficially kicks off today after the closing bell with a report from aluminum giant Alcoa.