Investors have been enjoying a powerful period of growth in the stock market for years, but at a certain point, all such runs have to end. Are we at such a moment now? As the MarketFoolery guys discussed just last week, interest rates are up, 10-year Treasury yields are at a seven-year high, the trade war is getting hotter, and there are now other good places with less risk for investors to park their cash. And all of a sudden, as if on cue, market volatility is spiking.

In this segment from MarketFoolery, host Chris Hill and senior analysts Jason Moser and Matt Argersinger discuss market conditions, the outlook, and investment strategies for such times.

A full transcript follows the video.

This video was recorded on Oct. 10, 2018.

Chris Hill: Let's start with the market in general. We talked about this, Matty, on Motley Fool Money, the rise of interest rates, the 10-year Treasuries hitting a seven-year high. Not surprisingly, those things that have been shoved in the corner for so long, bonds, are now suddenly more attractive, and we're seeing a healthy amount of volatility today.

Matt Argersinger: Yes, the most volatility I think we've seen since February. It feels like it's been a while as we tape. The Dow's down about 400 points. It's just certain parts of the market. If you look at Netflix, for example, it's down more than 20% from its high. Amazon's down almost 15% from its high. I don't know what Facebook is, but Facebook's down even lower from its high and so. The leaders of the market, even before this recent volatility that we've had in the past week, have all come down pretty sharply.

Jason and I kind of looked each other this morning and were like, "It's about time!" It feels like the stock market's been grinding higher steadily for so long this year, and going back several years now. We haven't had as much as even a 5% pullback. That feels rare. So, it's nice to see it.

Bonds do matter, interest rates do matter. There's now more competition for stocks.

Jason Moser: Man, I don't know what the problem is. Everything selling off, that's fine. You know what is in the green right now, Chris? McCormick. The market knows that at the end of this day, especially at the end of this day, you're going to want to go home and have something flavorful for dinner, and chances are, McCormick is going to be playing a part in that. Now, watch, it'll finish down in the red after I jinx it.

Hill: Nice work!

Moser: Yeah, thanks a lot! Matt Frankel and I were talking about this on Monday's Industry Focus. We're seeing long-term rates start to push up a little bit. The volatility comes into play because it seems like now, the bigger institutional investors have these risk-adjusted options to invest in something other than stocks. And it makes sense. I mean, if you can get x return for basically zero risk, there a lot of lot of parties that are going to consider that.

For us, it doesn't really change our style of investing. But I think it is worth noting, at least, that if you invest like we do, chances are, you probably have some nice growth names in your portfolio. And chances are pretty good that those growth names are getting hit pretty hard. It's worth noting that there has been a lot of great expectations pulled forward in a lot of those names. Those high-growth names taking a little bit of a haircut today, it's OK. That's supposed to happen.

What I think this really makes the argument for is diversification. Diversification is really what helps counter that. I made a little bit of a joke with McCormick, but frankly, owning McCormick in my portfolio, I feel better knowing that I've got a staid dividend aristocrat to go along with those other high-growth names that I hold, as well.

Hill: I think it's a for diversification, and Matty, it's also a case for having a watch list. We talk about that a decent amount and it's for days like this.

Argersinger: Absolutely! About a month ago, I had a long list of stocks that I've been waiting to buy. And I've stupidly been waiting, because they've gone up so much. What I said was, "I'm going to go in, I know a lot of these companies are near their highs. They're up 100% over the last year. I'm going to go buy a little bit of each of them." Knowing that for days like this -- hopefully this downturn is a little sharper and I get even better prices -- but, knowing that there'll be a time for me to eventually double down on those, that's why I have a watch list.

Moser: I'm going to make a promise to you right now, both of you guys. By the end of the day, I will have added to a position in something that I own. I don't know what it's going to be yet. But I'm going to click the buy button today. It's going to happen!

Hill: Share it later, though?

Moser: Two days after said transaction occurs.

Hill: Exactly.