Excessive variability in share prices has only drawbacks

We observe very high variability in share prices that is excessive in light of fundamentals. This situation has serious drawbacks: It destabilises the real economy through the wealth effect; It discourages investment in listed shares by institutional investors and households, which could lead to a contraction in equity markets, wipe out listed equity markets as a source of corporate finance and encourage the growth of unlisted shares (private equity, family companies, etc.).