We don't like volatility in the market, because it means uncertainty. We can't properly plan for what we can't predict. And it's true that volatility in the market can be a challenge for leaders in the industry. It adds a level of risk to decision-making and makes it difficult to act with conviction. But can volatility be a good thing?
On the June 22nd episode of my Internet radio show, we spoke with Les Parker of Loan Logics and he made an interesting point. Although volatility is difficult to deal with, a lack of volatility in the industry could be a sign of a lackluster market. When there is calmness in the market, there is complacency in the market.
Volatility, for better or for worse, means movement. It means that things are happening. Given all of the burdensome regulation we've had over the years, the last thing we want is for the industry to slow down. Motion, however erratic, means that things are actually happening. So just remember, when the market seems a little volatile, at least that means it's alive!
There's a word we hear in the mortgage industry that often scares us. Although it's a part of the business we're in, hearing it can send shivers down our spines. It's unpredictable and it's difficult to face with any level of clarity. It's the monster in the closet that makes us uneasy about the decisions we make. That word is