Why Volatility May Be Here To Stay

As we start to close down the year it's easy to look at charts of the DOW, S&P 500, or any other US stock market index and see the wide swings throughout the year.  Ironically the S&P 500 for all of it's movement is on pace to finish just where it started 1257.

There are a plethora of reasons of Why Volatility May Be Here to Stay and this article on Morningstar points out a few.  Europe seems to be the over riding reason in my view as to why we will see volatility continue.  Stocks trading according to fundamentals is getting lost in the European financial crisis noise not to mention the constant and consistence Washington politics.  However I think we could be setting up for some severe weakness in the beginning of the year as retail sales could come in lower than expected and profit margins weakened as retailers slashed prices in order to get people back in the doors.