Uncertainty Is Good for Your Portfolio

Why It Matters

This reframes volatility from a risk to a potential advantage: investors and portfolio managers who resist complacency and act during uncertain times may capture superior returns. It underscores the need for disciplined, contrarian positioning rather than reactionary trading during market turmoil.

Summary

The speaker argues that market uncertainty and volatility often create the best buying opportunities, while calm, predictable periods tend to be the worst times to be invested. Historical episodes of complacency—when investors felt certain about earnings and the economy—preceded poor market returns because assets were mispriced. Conversely, periods marked by pronounced volatility correspond to stronger subsequent market performance. The takeaway is that discomfort and uncertainty can signal attractive entry points for long-term investors.

Original Description

Jim Paulsen explains why some of the best returns come from periods of high uncertainty.