After a vacation from high volatility that last more than a decade, the volatility ignited by the coronavirus epidemic is something advisors are going to have to adjust to for the long term, two money managers said today.

David Jilek, vice president and chief investment strategist for Gateway Investment Advisers, and Alex Pire, head of client portfolio management for Seeyond, Natixis Investment Managers, U.S. Distribution, discussed the new higher volatility levels as the new normal of markets during a Natixis seminar today.

“This is markedly different from the volatility environment of recent years,” said Pire, who noted that volatility levels in March were higher “than any month of the Great Depression.” Pire said that whenever volatility spikes in any one month, that usually means high levels for at least another year.

“We would expect that scenario to go on, given the high degree of uncertainty that comes with this pandemic and its impact on the economy,” Pire said. “This is playing out as a classic spike followed by an elevated period.”

Pire, noting recent reports that a vaccine is on the way, said normal volatility levels won’t return until there is an effective vaccine. He added that even if that comes soon, there are still other factors, such as a presidential election year and the exit of the U.K. from the European Union, that will prevent an immediate return to stable markets.

“Investors are just going to have to get used to this,” Pire said. He said he is making portfolio adjustments, looking for stocks with appropriate betas.

Jilek said his firm is using option strategies to reduce risk. “Our approach doesn’t have a forecast approach; ours is more of a read and react approach,” he said. He said his firm reacts to S&P 500 options as a strategy, measuring realized and implied volatility.

Implied volatility is the market's forecast of a likely movement in a security's price. It is a metric used by investors to estimate future fluctuations of a security's price based on certain predictive factors.

Separately, in a recent comment, Capital Group CEO Tim Armour of the American Funds, said this kind of volatility is not unprecedented.

“While this disease is new, there have been many pandemics and other crises in the past, and markets have survived them all,” Armour said.

He added that “a fair amount of panic has taken hold around the world."

But he added that in previous bouts of market volatility, “hot spots and flareups lasted for a while, but then they went away. Eventually, the spread of the virus will slow down and people will get back to normalcy, as will markets.”