Is this the most volatile market in 50 years?

[dtbach]

Got an unsolicited email from some stock market guru with this opening:




Dear Investor,
Jack Bogle is a legend on Wall Street.
As the father of passive investing, he’s arguably done more for the average investor than any other person in history.
He’s also witnessed every type of market condition imaginable.
Which is why his comments on the record amount of volatility we’ve seen this year made headlines.
Here’s what he said…

“I have never seen a market this volatile to this extent in my career. Now that’s only 66 years, so I shouldn’t make too much about it… I’ve seen two 50% declines, I’ve seen a 25% decline in one day and I’ve never seen anything like this before.” — Jack Bogle, Vanguard Founder​

​

Make no mistake, this historic bull market is in uncharted waters.
And the constant roller coaster in stocks only makes investors even more uneasy.


Is this a valid statement? I'm thinking the market has been a great deal more volatile in past times.

 

[GravitySucks]

Mr. Bogle said that April 6, 2018.

I didn't notice anything out of the ordinary then or now, but I no longer pay attention to the intraday swings.

What kind of annuity they trying to sell you?

 

[Totoro]

Seems invalid. Just look at the VIX, the volatility index of the S&P 500

https://finance.yahoo.com/chart/%5EVIX

If anything, it's still on the low side.

 

[dtbach]

Seems invalid. Just look at the VIX, the volatility index of the S&P 500

https://finance.yahoo.com/chart/^VIX

If anything, it's still on the low side.

yeah, I remember 2008/2009 and those seemed to be much larger swings from day to day over a much longer period.

 

[audreyh1]

Only perhaps on point terms on the DJ Index. Not at all in percentage terms.

The VIX went way higher in 2008 and 2009. And even in 2012 through 2016.

The volatility of the market was super low last year. It lulled people to sleep. Now they think the market is super volatile. No, it's really just getting back to more normal volatility.

 

[dtbach]

I'm thinking some of this was taken out of context from Bogle. Just to make a sales pitch. I unsubscribed from this guy. Don't know how he got my email.

 

[nash031]

I don't get it... I keep seeing these headlines about 500 point drops in the Dow and think "so what? That's less than 2% in a day." I think some folks are sensitive to it because in our investing lifetimes, indeed less than 10 years ago, the Dow was in the 6000s and a 500 point swing was a big deal. Some of us might've been around when the Dow was 800. It's all relative. I suspect by the time I'm 80, the Dow will be having wild 2000 point swings in one day!!! Panic!

 

[Aerides]

You got spam, and want to ask if it's valid?

 

[target2019]

Could not read the red text on my computer screen. Maybe I should drop my spam filters so I can get offers like that.

 

[jjflyman]

Some of the members here are saying this is a normal market, and no big deal.
I disagree, this is the most volatile market that I can remember and I'm 59. Yes, there were occasional big drops before, but I don't ever remember getting up day after day and expecting 300-500 point drops every day.(except maybe in 2008)

Tune out all the opinions of the member here and give it your own eye test. What do you see.

 

[imp4]

Track the VIX. Do the math.

Are the percentages moving as much as you think?
Or does 500 points on the Dow just look like a lot?

 

[ERD50]

Some of the members here are saying this is a normal market, and no big deal.
I disagree, this is the most volatile market that I can remember and I'm 59. Yes, there were occasional big drops before, but I don't ever remember getting up day after day and expecting 300-500 point drops every day.(except maybe in 2008)

Tune out all the opinions of the member here and give it your own eye test. What do you see.

You need new glasses! What the heck are you talking about?

See the chart from imp4. You need a refresher on "percentages". And history.

-ERD50

 

[Midpack]

Some of the members here are saying this is a normal market, and no big deal.
I disagree, this is the most volatile market that I can remember and I'm 59. Yes, there were occasional big drops before, but I don't ever remember getting up day after day and expecting 300-500 point drops every day.(except maybe in 2008)

Tune out all the opinions of the member here and give it your own eye test. What do you see.

The only legitimate comparisons are on a percentage basis. Point drops are misleading - if you’re going to use them, you’re going to find market swings unnerving for the rest of your life!

I’m still sleeping like a baby at night, my equity holdings have tripled since 2009 and my overall AA has done beautifully. If I lose 10% or even more, I’m still miles ahead - like many here. YMMV

 

[NW-Bound]

Bogle said the above in April 2018, when the S&P 500 had posted 26 moves of at least 1 percent since the year began. The Dow had dropped 12% from its high in late January (do people remember the fast drop caused by ETFs betting on the VIX collapsing?).

In that interview, Bogle added

“Stocks go from hand A to hand B, from buyer to seller or seller to buyer, and I think it sometimes concerns the true long-term investors,” he said. “It disturbs the investors because they see this and they think it’s significant. If it’s significant to them, and they panic in a big market decline and get out, they’re the losers.”

See: https://www.cnbc.com/2018/04/05/jac...rket-this-volatile-in-his-66-year-career.html.

 

[24601NoMore]

Some of the members here are saying this is a normal market, and no big deal.
I disagree, this is the most volatile market that I can remember and I'm 59. Yes, there were occasional big drops before, but I don't ever remember getting up day after day and expecting 300-500 point drops every day.(except maybe in 2008)

Ditto that. Totally agree. It's surreal and in my experience (mid 50s) unprecedented in recent memory outside of 2008.

 

[gcgang]

I don't get it... I keep seeing these headlines about 500 point drops in the Dow and think "so what? That's less than 2% in a day." I think some folks are sensitive to it because in our investing lifetimes, indeed less than 10 years ago, the Dow was in the 6000s and a 500 point swing was a big deal. Some of us might've been around when the Dow was 800. It's all relative. I suspect by the time I'm 80, the Dow will be having wild 2000 point swings in one day!!! Panic!

I do remember when the Dow was 800. Had a friend who was a stockbroker. He used to say if the market was up 10 points or more (little more than 1%), hey, let's go to the bar to celebrate. If it was down 10 or more, it was, hey, let's go to the bar to lick our wounds. I think he just liked to drink.

 

[mamadogmamacat]

Short answer, No it is not.

Longer answer, see the chart embedded in this article:

https://www.marketwatch.com/story/a-bruised-stock-market-looks-to-the-fed-for-relief-2018-12-08

There were more days of 1% to 3% swings in 2015 than there have been this year,
as well as during the last recession, the dot com bubble, the late 1980's etc etc

And I am also in my fifties, so us early retirees jut need to keep our big boy/girl pants on is all

 

[marko]

This is why I like to use a 3 year average on measuring my portfolio rather than year to year.

You have good years, bad years. Just like this year, 2011 and 2015 were flat (but the year after each was great) and averaged out to a respectable number. Note that they were flat years within a bull market.

Short story for me: Up, down, up, down. Nothing to see here other than some re-balancing and perhaps a few small buy opportunities. Keep them dividends coming.

 

[ERD50]

Some of the members here are saying this is a normal market, and no big deal.
I disagree, this is the most volatile market that I can remember and I'm 59. Yes, there were occasional big drops before, but I don't ever remember getting up day after day and expecting 300-500 point drops every day.(except maybe in 2008)

Tune out all the opinions of the member here and give it your own eye test. What do you see.

Ditto that. Totally agree. It's surreal and in my experience (mid 50s) unprecedented in recent memory outside of 2008.

Are these posts due to a memory problem, or an arithmetic problem? Or something else?

-ERD50

 

[marko]

Are these posts due to a memory problem, or an arithmetic problem? Or something else?

-ERD50

+1
I suspect the media may be the "something else ".

 

[Andre1969]

In the overall scheme of things, 2018 hasn't been particularly jittery. It's just because the Dow, Nasdaq, and SP500 have gotten so high numerically, that the point spreads start looking scary. And, if you have a large balance, you're going to see big dollar swings. But, if you keep it in perspective, and look at the percentages instead, it doesn't seem so bad.


Personally though, I think 2018 has been annoying, because of a few "false starts". Back around the end of January, I think my portfolio was actually up around 5% so it seemed like 2018 was off to a great start. But then it cratered. However, things did improve, and around August/September, I think I was up around 6-7% for the year. Then October hit, and wiped out my gains for the year. November bounced back a bit, but I haven't bothered to calculate anything for December yet, so I might still be down for the year. Still, "down for the year" is a far cry from "wiped out".


There's another, personal reason though, that I think 2018 has been annoying for me. There was a few times that I came really close to the $2M milestone mark, for net worth. But, then I bought a house in September, and then with market losses, it seems like that $2M milestone keeps slipping further away. I know I'll cross that threshold eventually, and logically I know that it's not like anything truly magical happens once we hit these various thresholds. But, still, I want to get there!

 

[Maenad]

There's another, personal reason though, that I think 2018 has been annoying for me. There was a few times that I came really close to the $2M milestone mark, for net worth.

I'm in a similar situation - we're thisclose to FI, and keep falling backwards. It's making DH and I grumpy! I do have to laugh at myself - first world problems!

 

[joeea]

Some of the members here are saying this is a normal market, and no big deal.
I disagree, this is the most volatile market that I can remember and I'm 59. Yes, there were occasional big drops before, but I don't ever remember getting up day after day and expecting 300-500 point drops every day.(except maybe in 2008)

Tune out all the opinions of the member here and give it your own eye test. What do you see.

Even though it was written back in March, this might clear up some of your confusion:
https://www.fool.com/investing/2018/03/16/if-you-think-the-dow-is-volatile-now-you-need-a-hi.aspx

 

[Andre1969]

Even though it was written back in March, this might clear up some of your confusion:
https://www.fool.com/investing/2018/03/16/if-you-think-the-dow-is-volatile-now-you-need-a-hi.aspx

Thanks for posting that chart; it's a real eye opener. Interesting that, even in the Great Recession, two of the biggest Dow gains were in October of 2008. The main thing I remember was that it seemed like everything started tanking in September, crashed even worse in October, and then bottomed out around Thanksgiving. But, even in that ~3 month plummet, it wasn't a total free-fall.


I wonder how 9/11/01 would have factored in, if the markets hadn't been closed down as a result of the tragedy, and the ensuing panic?

 

[Ed B]

Got an unsolicited email from some stock market guru with this opening:




Dear Investor,
Jack Bogle is a legend on Wall Street.
As the father of passive investing, he’s arguably done more for the average investor than any other person in history.
He’s also witnessed every type of market condition imaginable.
Which is why his comments on the record amount of volatility we’ve seen this year made headlines.
Here’s what he said…

“I have never seen a market this volatile to this extent in my career. Now that’s only 66 years, so I shouldn’t make too much about it… I’ve seen two 50% declines, I’ve seen a 25% decline in one day and I’ve never seen anything like this before.” — Jack Bogle, Vanguard Founder​

​

Make no mistake, this historic bull market is in uncharted waters.
And the constant roller coaster in stocks only makes investors even more uneasy.


Is this a valid statement? I'm thinking the market has been a great deal more volatile in past times.

I got the same email. At first glance it seemed legit, like something official from Vanguard.