n my opinion, there are two rules that must be respected when it comes to market behavior. The first? The time to worry about volatility isn't when it is underway, but before it actually happens. Risk must always be managed pre, not post. The second? The best time to chase performance is when it doesn't exist. The biggest and strongest returns don't come from the middle of the "trend" which we only see with hindsight, but from the turn which few are willing to position for until well after the fact. This market breakdown took many stocks down to January 2014 levels. I have clearly had a tilt toward being more negative in writings over the past year and a half, largely because inter-market trends (particularly inflation expectations) massively diverged from broad U.S. equity movement. Day after day, it appeared that sentiment was wrong. Of course, there is a fine line between being wrong, and early. It turns out, the bears have been more right than the bulls for a long time now. It simply took a few weeks of decline to prove that out. Markets are humbling in that way. They can make bulls look right and bears look right, all depending upon where you end the calendar."The backbone of surprise is fusing speed with secrecy." —Carl von Clauswitz http://www.marketwatch.com/story/is-there-reason-to-believe-...