Wise Wealth Management

Dennis Covington | Principal

Insights on the keys to enjoying a "healthy wealth".

Is Today's Market More Volatile?

February 2016

Is Today’s Market More Volatile?

This question has come up frequently in recent meetings with investors. It is not surprising when you consider the level of media attention on volatility and the advent of new phrases like Flash Crash and High Frequency Traders.

A recent article published by The Motley Fool investment website caught my eye. The author, Morgan Housel, produces four charts that show the volatility of the S&P 500 returns in daily, weekly, monthly and annual terms by decade. You can view his article and charts by clicking here.

What may surprise you most is that the last five years have actually been more tranquil than any period since the 1950’s despite what the financial media continually tells us. The “wild” 2000s had similar annual volatility to the 1950’s when the S&P 500 generated 467% in total returns.

The most important lesson is that over meaningful periods– year-to-year, decade-to-decade – market volatility is the same as it ever was. Investors will have a much better investment experience when they ignore the short-term “noise” and stay focused on the long-term strategy that a caring wealth manager has built for them.

Email A Friend Print This Article