Market Volatility Is Up … Again

Nov 14, 2018

Download PDF 386kB

Monday was a challenging day for the markets, as we saw sharp declines of 2% in U.S. large-cap stocks.1 The rout was fueled by declines in technology stocks, with mainstay names like Apple, Nvidia and Advanced Micro Devices declining by 5% or more. This year, it seems like we have experienced heightened market volatility — October was a painful example, with several days of sharp market declines that wiped out the gains we reaped earlier in the year.

Some of this volatility certainly may be attributed to the recent midterm election — data shows that market volatility can go up during election years. But you may still be wondering if this level of volatility is “normal.”

What Is “Normal” Market Volatility?

In fact, on average, markets historically have pulled back by 5% three times in any given year. Going back to 1980, the S&P 500 has had an average intra-year decline of 13.8% from peak-trough — but the market finished with a positive return in 29 out of those 38 years. There can be some years when the market is abnormally calm, like we experienced in 2017. In that year, the peak-to-trough decline was just 3% — the smallest intra-year pullback since 1995.

Click here to download the full article.


Source: Morningstar®. US Large Cap stocks are represented by the S&P 500 Index.

Author(s)

Rafia Hasan Headshot Photo
Rafia Hasan, CFA, CFP®
Principal, Chief Investment Officer
View Profile
1  Kimball, Spencer, “Trump says tariffs on $200 billion of Chinese goods will increase to 25%, blames slow progress in trade talks,” CNBC, May 5, 2019, https://www.cnbc.com/2019/05/05/trump-says-tariffs-on-200-billion-of-chinese-goods-will-increase-to-25percent-on-friday.html,accessed May 13, 2019.

2 Pramuk, Jacob, “China is raising tariffs on $60 billion of US goods starting June 1,” CNBC, May 13, 2019, 
https://www.cnbc.com/2019/05/13/china-is-raising-tariffs-on-60-billion-of-us-goods-starting-june-1.html, accessed May 13, 2019.

Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services and fees is set forth in Wipfli Financial’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content.


Return data represent past performance and are not indicative of future results. Historical returns of indices do not reflect applicable transaction, management or other applicable fees, the incurrence of which would decrease historical performance results. Index information has been compiled by Wipfli Financial from sources Wipfli Financial deems reliable, but has not been independently audited or verified. Historical performance results for investment indices and/or categories have been provided for general comparison purposes only. Indices are unmanaged and unavailable for direct investment. Any charts and graphs represented herein are for informational purposes only and cannot in and of themselves be used to determine which securities to purchase or sell, or when to purchase or sell securities.

Find an Advisor