Volatility has taken hold of the financial markets, and it’s likely to bring out the worst in investors. This year, the S&P 500 index swooned nearly 5% in January, remained flat in February, and surged more than 6.5% for the month of March. That’s after erasing last year’s August-September 8% drop with an 8.4% October gain. Moreover, smaller-company stocks, represented by the Russell 2000 index, were down more than 20% from their late-summer peaks in February, before storming back more than 10% since then. Moves like this drive investors crazy, often causing them to trade their holdings in damaging ways. Here’s how ... (full story)