The daily moves in the market have been amazing in recent weeks. I was curious to know how amazing, so I took a look at the daily performance of the S&P 500 since the Broadleaf Growth Equity Portfolio started six years ago.
Since our portfolio’s inception – 1,583 trading days ago – the S&P 500 has had moves of 1.5% or more – up or down – twenty percent of the time. However, over the last 75 trading days, the instances of 1.5% or more moves have more than doubled to 51% of the time. Keeping in mind the fact that the longer term period includes the horrific days of the Great Recession in 2008-2009, this increase in volatility is even more remarkable.
For those who were wondering, during the Great Recession – a period from September 2008 to December 2009 – the S&P 500 made 1.5% or greater moves roughly 38% of all trading days, which is still less than what we’ve experienced recently. The major moves of 2.5% or more, however, were more common.
I don’t know what this means other than to say we are indeed in unusual territory with all the daily volatility, particularly considering the fact that earnings are quite good and leading indicators of the economy have been improving. While the risks from Europe and Washington are great, no catastrophes have yet been realized, as was the case with Lehman Brothers and Bear Stearns in 2008.
The ride in equities appears to be getting even bumpier than normal, but the asset class, I believe, will be the best performing over the long haul.