Good Volatility vs. Bad Volatility: How Corey Thinks About Market Declines

• Corey says that a large one-day decline can feel uncomfortable at any account size, but that not all volatility is the same.

• He describes good volatility as a price decline in a high-quality business that, in his view, has a good chance of recovering over time, which may give long-term investors a chance to add at lower prices.

• He describes bad volatility as a decline in a business that may not recover, where lower prices are not necessarily an opportunity.

• He suggests reviewing holdings one position at a time and asking whether each decline looks like good volatility or bad volatility.

• He says some investors keep cash available for opportunities, and he notes that this involves trade-offs.

• These are Corey's opinions for education. They are not forecasts, and nothing here is a recommendation about any security.

Corey opens by noting that the previous day was a volatile one in the stock market and that many investors may have seen a large decline in their accounts. He says a decline of that kind can show up as a meaningful dollar amount whether an account is small or large. This recap does not repeat the figures he mentions.

He then explains that he plans to talk about good volatility and bad volatility, how he tries to tell them apart, and then give a brief market update. He gives the standard reminder that the video is a financial education presentation, that viewers should do their own due diligence before acting on anything they hear, and that the opinions are his alone. More disclosure information is available on the firm's website.

Corey says that, in his view, not all volatility is bad. When the price of a high-quality business falls and the business is likely to recover over time, a long-term investor may be able to buy at a lower price and potentially benefit more if the price later recovers. He frames this as good volatility.

He contrasts that with bad volatility, where there is real uncertainty about whether a business will remain healthy or whether its price will come back. In that case, he says, a lower price may not be an opportunity at all. A price decline alone does not tell an investor which kind of volatility it is, and a recovery is never guaranteed.

Corey uses several well-known large companies as examples in the video to show what he means by quality. He points to businesses that are diversified across several large lines of activity, that disclose their assets openly, and that have a long record of weathering past downturns. He says that for businesses like these, a sharp price decline may look like an opportunity to a long-term owner. This recap does not name those companies and does not suggest that any of them is suitable for any investor.

He offers a simple test: if you own a business and, during a decline, you find yourself hoping the price goes lower so you can add more, that may be a sign you view it as high quality. If you do not feel that way, he says, that instinct may be telling you something. Even high-quality companies can decline for long periods, and some may not recover. Diversification does not eliminate the possibility of loss.

Corey discusses a few examples of businesses where, in his view, a decline carries more uncertainty. These include a company that may not be able to stay in business, and companies in industries that have historically been cyclical or that have not produced steady long-term growth. He says that in cases like these, the odds may not be as favorable and a lower price may not lead to a recovery.

He is careful to say that any company could surprise investors, and that he is not saying a recovery is impossible. He also says some investors choose to own higher-risk, higher-reward positions, but that they should be aware of the difference between those holdings and higher-quality ones. His comments are personal opinions, not forecasts, and this recap does not recommend buying, selling, or holding any security.

Corey encourages investors to look through their portfolios at the individual position level and ask whether a decline in each holding looks like good volatility or bad volatility. If an investor feels confident that a holding is the type that may recover over time, he says, a decline may be an opportunity if the investor chooses to act on it, and holding steady may also be reasonable.

He adds that investors who have been in the market a long time may find themselves waiting for volatility, and that some keep a portion of their assets available in case an opportunity appears. Holding cash has a cost, since cash may earn less than other assets over time, and an opportunity may not appear when an investor expects. Whether any approach fits depends on individual goals, time horizon, taxes, and tolerance for loss.

He closes with a brief note on the market that day, then thanks viewers. This recap does not repeat the index figures or other numbers he mentions.

The common thread is that a price decline is a prompt for questions, not an answer. Asking what a business does, how it is financed, and how it has behaved in past downturns may help an investor separate a temporary decline from a lasting one. Even so, past behavior does not predict the future, companies of any quality can decline and may not recover, and buying after a decline can result in further losses.

For most households, the planning questions are less about any single holding and more about how a portfolio is built. How much is concentrated in one position or theme, how much cash is available to cover spending without selling at a bad time, and whether the plan can be held through a long stretch of volatility are all worth reviewing. A written plan and a long time horizon may help, though neither can eliminate the possibility of loss.

This market update is a financial education presentation. It is not personalized investment advice, and it does not recommend any security, company, or strategy. Do your own due diligence before acting on anything you read or hear here. The opinions expressed are Corey's alone, and investing involves risk, including the possible loss of principal. More disclaimer information is available on the Disclosures page.

A volatile day is most useful when it prompts better planning questions, such as how concentrated your holdings are, how much liquidity you hold for spending, and how you would respond if a position lost a large share of its value.

Explore the firm's investment planning approach, or contact Ankerstar Wealth to discuss how these themes relate to your own planning questions. Any decision should reflect individual circumstances and a full review of risks, taxes, and trade-offs.