What Are The Odds?

John Noonan Uncategorized

A Look at Daily Market Returns Our last piece on market volatility prompted questions about the ranges of market returns, particularly in a given day. We collected Dow data from 1928 through yesterday to get the answer. Take a look… This graph represents 22,130 days of daily returns, most of which were uneventful, with the Dow moving no more than 2% either up or down. Only about once every three weeks on average do we experience a daily return greater than 2%, whether it’s positive or negative. The worst day was “Black Monday”, October 19, 1987, when the index dropped …

Is Volatility Normal?

John Noonan Uncategorized

  The short answer: yes. But let’s add some perspective. You may read a lot about volatility – or how much the market goes up and down – being the “new normal”. Another short answer: untrue. Volatility has been an integral part of the investing experience since the very beginning. As a perceived risk, it’s one of the reasons stocks have produced, and are expected to produce, higher returns than less volatile assets like bonds and cash. Risk equals reward, so they say. A client recently mentioned how the market seems to go up and down much more than in …