The following article, published by The New York Times on 11/26/18, shows how the total number of volatile days in 2018, as defined by 1% or greater fluctuations (up or down) in the S&P 500 index, remains below average when compared to the average annual number of 1% or greater fluctuations since 1928. The last two weeks of market volatility has increased the 2018 figure, however it still remains below the historical average.
According to the data, the average number of days with 1% or greater fluctuations has been 62 per year. Compare this to 2017, which had only 8 days with a 1% or greater fluctuation, and it’s no wonder why investors feel shaken by the recent volatility!
Although the long-term historical trend for the market is an upward sloping curve, there are many bumpy and downward periods too. We need to remember that it’s all part of how the market works. Since the Great Recession market recovery began nearly ten years ago, there has been rather consistent and stable upward momentum. Investors have become used to this feeling of stability and have forgotten the discomfort caused by repetitive down days. We are here to remind you that a little discomfort is normal, but too much discomfort may mean an adjustment should be made to your strategy.