Did the Fourth Quarter Wake Up a Sleeping Bear?

January 25, 2019 | Julianna Paterra, CFA, CAIA, Research Analyst

Like past bull markets, this most recent one since 2009 has had relatively little daily volatility, which we define here as moves greater than two standard deviations from the mean daily return. Specifically, we look at two standard deviations to the downside during a calendar year basis as compared to its historical average over the last few market cycles. This means the S&P 500 would’ve fallen about 2.2% or more in a single day. The last three bull markets are roughly visualized through the valleys in this negative volatility, which is indicative of the smooth ride up investors have had.

Not surprisingly, the majority of total positive and negative two standard deviation moves have been on the negative side at about 60% of the time since 1990, or in days, about seven trading days per year. In 2018, investors experienced significantly more downside volatility than in recent years; however, within the context of bear market years, this move is not so bad. While this is an interesting story from the data, ultimately macroeconomic and geopolitical developments will undoubtedly determine if this bull market has any life left.

Print PDF

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Julianna Paterra, CFA, CAIA
Research Analyst

Get to Know Julianna

Related Content

The Evolution of Private Credit chart


The Evolution of Private Credit

With roughly $48B of U.S. private credit fundraising taking place in 2018 ­­— surpassing 2008 levels of $42B — private…


2019 Halftime Market Briefing

Live Webinar – Thursday, July 18, 2019 – 1:00-2:00 PM CT

Russell Indices Incorporate Uber Exciting IPOs


Russell Indices Incorporate “Uber” Exciting IPOs

It’s that time of year again! The end of June brings longer summer days and the annual Russell index reconstitution….

Are Americans Swimming in Debt Again? bar chart


Are Americans Swimming in Debt Again?

The eleven-year recovery since the 2008 financial crisis has been good for most Americans, allowing many to…

When the Experts Are Wrong chart


When the Experts Are Wrong

Since the end of October, the yield on the 10-year Treasury fell more than 1% and as of writing stands…

Tank on Empty? Proposed Tariffs on Mexico Will Heavily Impact the Auto Industry


Tank on Empty? Proposed Tariffs on Mexico Will Heavily Impact the Auto Industry

On May 30th, President Trump announced via Twitter that the United States will impose a 5% tariff on all Mexican…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >