“While I take no pleasure in others’ misfortunes, we’ve historically made most of our profits from other investors behaving in a panicked and irrational fashion and selling us certain stocks at prices far below their intrinsic value.” -Whitney Tilson-

Is market volatility really unique? Is it something to be feared? Despite the angst it often causes, market volatility is really quite common. The S&P 500 has experienced a double-digit pullback in a given year 60% of the time since 1975. Interestingly, 60% of the time when the S&P 500 declined by double-digits, it ended the year with a positive return.

Although volatility is normal and should be expected, investors often fret when valuations begin to decline, prompting them to quickly liquidate the depressed holdings. In doing so, they often solidify a loss.

Below is a video, which offers a well-grounded perspective on market volatility. The presenter, Scott Becker, CFA, is the Head of Portfolio Specialists with Calamos Investments. Perhaps, as Franklin D. Roosevelt observed, the “only thing we have to fear is fear itself.”

Whitney Tilson is a Hedge Fund Manager and Author