Why Malaysians should stop fearing the US stock market because of perceived volatility – and how to turn volatility into an advantage, whether you are a trader or a long-term investor.

The Fear That’s Costing Malaysians Their Wealth

Every time the S&P 500 drops 2–3% in a single session, the media headlines turn dramatic. Social feeds implies that “the US market is too volatile”, and many investors retreat back into what feels safe: staying in cash, EPF, or a handful of calm, familiar Malaysian stocks.

This fear is understandable, but it is also extremely expensive. The core misunderstanding is this: volatility is not the same as risk. Volatility is simply how fast prices move up and down. True risk is the permanent loss of capital. Confusing the two causes investors to avoid one of the most powerful wealth-creation engines in history - the U.S. stock market – while parking money in a market that has barely grown over the past decade.

“The true investor welcomes volatility. A wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.” – Warren Buffett

For Short-Term Traders: Volatility Is Your Edge

If you are a swing trader or intraday trader, volatility is not a bug – it is literally your business model. Without price movement, there is no profit. A flat market is a dead market for traders.

In the US, major indices like the S&P 500 and Nasdaq 100 commonly move between ±0.5% to ±1% per day on average, with many sessions moving much more. The E-mini S&P 500 futures, for example, often see 45–80 points of intraday movement, creating thousands of dollars of price range per contract. That is the raw material traders need to generate income.

Why U.S. Markets Are Superior for Active Trading

• High liquidity. Massive daily volume in US stocks and index futures allows cleaner entries and exits, tighter spreads, and lower slippage compared to many counters on other markets.
• Consistent movement. US indices and leading stocks regularly show 2–5% swing moves over a few days – ideal for swing trading setups like pullbacks, breakouts, and trend trades.
• Better technical behaviour. High participation and liquidity in US markets make technical levels, chart patterns, and price action setups more reliable.
• More instruments and strategies. From stocks and ETFs to options and index futures, US markets give traders multiple ways to express a view and manage risk.

By contrast, the FBM KLCI is often “calm” because it simply doesn’t move much. Daily moves of 0.1–0.3% in many blue-chip counters mean fewer clean setups and fewer opportunities to compound trading capital.

“Volatile” but More Often Positive

Since 1926, the S&P 500 has finished with a positive return in about 73% of calendar years. Looking just at the last two decades:

Metric (Last 20 Years)	S&P 500	FBM KLCI
Annualised return	≈ 10.35%	≈ 2.19%
Positive years	17 out of 20	9 out of 20[cite:53]
$10k / RM10k after 20 years	$71,742	RM15,412

In other words, the “volatile” US market has rewarded patience with far superior long-term returns, while the “calm” Malaysian market has largely failed to grow wealth after inflation, if we use the index as the benchmark.

What About Crashes? History Shows They Are Temporary

Over the past 150+ years, the US market has gone through wars, recessions, oil shocks, inflation spikes, and pandemics. Research on 19 major bear markets (declines of 20% or more) shows a consistent pattern: every crash was followed by a full recovery and new highs.

• Global Financial Crisis 2008: S&P 500 fell about 57%, recovered in ~5 years.
• Dot-com Bust 2000: fell about 49%, recovered in ~7 years.
• COVID-19 2020: fell about 34%, recovered in about 4 months – the fastest ever.

For long-term investors, the path has never been a straight line. But the direction has been remarkably consistent: upwards over time.

The Hidden Dangers of “Safe” Calm Markets

1. The Cost of Staying on the Sidelines

Many Malaysians avoid the US market or try to wait for it to “calm down”. JP Morgan’s research shows how costly this can be. From 2005–2024:

• Fully invested in S&P 500: $10,000 grew to about $71,750.
• Miss just the 10 best days: final value drops to about $32,871.
• Miss the 60 best days: you end up with only about $4,712[cite:58].

The problem? Many of the best days in the market occur right after the worst days. Investors who sell during volatility often miss the sharp rebounds that drive long-term returns.

2. Currency Erosion: The Ringgit vs US Dollar

Another hidden risk for Malaysians is currency. Over the past decade, the ringgit has weakened significantly against the US dollar – from roughly RM3.27 per USD in 2014 to around RM4.50 at its weakest points in 2023, before improving towards about RM3.89 in early 2026.

Malaysians who owned USD-denominated assets benefited from both:

• Capital gains from strong US market performance, and
• Currency gains as the USD strengthened against the ringgit.

Investors who stayed only in ringgit assets and the KLCI bore the full impact of currency erosion, with little growth to offset it.

Reframing Volatility: What the Pros Really Think

Many textbooks and news outlets treat volatility as a proxy for risk, but experienced investors like Warren Buffett strongly disagree. To them:

• Volatility creates mispricing – moments when great businesses can be bought at bargain prices.
• The real risk is not price swings; it is buying poor-quality businesses, overusing leverage, or panic-selling at the bottom.
• For investors who understand what they own and have a plan, “erratic markets” are an advantage, not a threat.

Historical data backs this up. Looking at all rolling 5-year periods since 1926, the S&P 500 delivered positive returns in about 93% of the time. Negative 5-year periods were rare and heavily concentrated during extreme events like the Great Depression[cite:25].

For any Malaysian with a 5-year or longer investment horizon in a diversified US portfolio, history suggests the odds of a positive outcome are overwhelmingly in your favour – if you stay invested and manage risk properly.

How Beyond Insights Helps Malaysians Harness Volatility

Understanding that “volatility is a feature, not a bug” of the stock market - is the first mindset shift. The next step is having a framework to act on this insight safely and confidently. That is where Beyond Insights’ proprietary SVS Framework comes in.

The SVS Framework

• Systematic – You follow a proven, rules-based process instead of chasing tips or reacting emotionally to headlines. Clear rules define when to enter, when to exit, and how much to risk.
• Versatile – Markets change. Beyond Insights' comprehensive curriculum can equip you with multiple approaches: long-term investing, swing trading, trend trading, and intraday trading. You learn to match the right strategy to the right market condition. Furthermore - you can learn to make strategic choices by understanding macro factors, industry correlations and business insights. These empower you to make good quality decisions no matter how the market is behaving.
• Safe – Capital protection comes first. Position sizing, risk limits, diversification, and protective strategies (e.g. options) are built into every system so that even when trades go wrong, the downside is controlled.

Beyond Insights has trained and coached over 8,000 students since 2008, supported by a team of more than 30 trainers and coaches who are themselves active traders and investors. The company has been recognised with multiple awards, including SME100 and “Most Preferred Financial Educator” at Invest Fair Malaysia.

Volatility Is Not Your Enemy. Inaction Is.

The story is clear: the calm markets usually delivered poor returns, while the volatile market (US) has multiplied wealth for disciplined investors and traders. Every major crash in the US has eventually recovered and gone on to new highs. The biggest danger for Malaysians is not volatility – it is sitting on the sidelines out of fear.

With the right education, systems, and support, volatility becomes a powerful ally. Start Turning Volatility Into Opportunity Today