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Volatility no stranger to marketsBut corrections offer opportunities for the astuteBy Bina Brown  When global stock markets are volatile, astute investors look for high quality opportunities. YOUR E-MAIL ALERTS(CNN) -- Anybody who has been watching global share markets in recent months would be aware of volatility. Substantial daily swings in the benchmark indicators have been relatively common, to the point where some commentators are saying the market is the most volatile they have seen in their working lifetimes. Clearly the impact on any given day on a portfolio of shares could be considerable. For some people it will be enough to keep them away until things calm down. The problem is, there will never be a time when the markets are not jumping around, so you might as well learn to take advantage of the buying opportunities it might present. According to Michael Knox, chief economist with Australia-based stockbroker ABN AMRO Morgans, market volatilities may have been higher in recent months than say, two years ago. However, it is only returning to the average volatility levels of the last 16 years. Knox says the average level of volatility for global markets has been 11.07 percent over the past 16 years. But the highest levels of volatility found during that period were more than twice as high as the current level. Volatility peaked at 23.07 percent peak in 1994 and 22.3 percent in 1997. Interestingly, the high volatility in 1994 was a period when the Federal Reserve was tightening interest rates in the United States. This is something we are currently experiencing. The 1997 period was a time of instability in emerging markets. Again, this is something we are experiencing now. The bottom line is that volatility could easily increase from current and recent levels. But not everyone is running for cover. Buying opportunitiesIndependent investor services provider Bourse Data says that current market volatility should not frighten investors from buying shares, providing they do their homework on potential investments. The general manager of Bourse Data, Rodney Weston, says many commentators are predicting the sharemarket environment will remain shaky for some time, which means good buying opportunities. "The longer the market goes down or sideways the better the chance of finding a good opportunity. The investors who lose big money during corrections tend to be those investors who panic and rush their decisions, or who don't understand their investments," says Weston. He says that researching stocks is not only vital for independent investors, but useful for those receiving advice, to double-check the quality of recommended stocks. "No investment is foolproof, but good information will steer you away from the absolute disasters." According to Tim Lincoln, managing director at research house and managed investment company Lincoln, the key to earning consistent returns and increasing the value of a share portfolio over the medium to long-term is through constant review to ensure it contains only fundamentally superior stocks. "When things look as they do at present, any short-term scenario is possible," Lincoln says. "Keep in mind that even if a major correction happens, history suggests that a new record should follow, therefore, for savvy investors market corrections generally present a buying opportunity." He advises that investors hold shares in only the financially strongest companies, and that they keep up to date with company announcements that could impact performance. Don't panic"The panic which grips many investors during times such as these is driven through their lack of faith in the quality of the businesses that they have invested in," Lincoln says. "If investors felt certain in the fundamental performance of the companies in which they invest, then sell offs are not of any significant concern." "In spite of the (Australian) market coming off its all time high, now is a good time to enter," Lincoln says. "Regardless of when you enter, if you choose quality stocks and have a sound investment strategy in place, they will generally perform very well over the medium to long-term." "It's the time in the market -- not timing the market," he says. "It's been proven time and time again that all shares have their troughs and peaks, but with great companies, the peaks are generally significantly stronger than the troughs." "Therefore, if there is a downturn or correction in the market, it is imperative that investors don't panic and realise their losses." Lincoln goes as far as to say that a downturn translates to opportunity, as great businesses are even better value following a correction. 
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