Chart of the week

Volatility has stayed elevated in 2018

S&P 500 Index daily price moves

April 13, 2018 | 1 minute read
  • Just over one quarter into 2018, today’s investment environment is very different from that of 2017. Last year, U.S. stocks rose nearly 22% and experienced little volatility along the way.1
  • Market momentum largely continued into January 2018 as the Dow Jones Industrial Average completed its fastest 1,000-point gain ever – in just eight days.2
  • Since then, conditions have changed drastically. In February 2018, the S&P 500 Index recorded its first negative monthly total return in the past 16 months followed by a 2.5% drop in March.3
  • As the chart highlights, stocks also have experienced significantly wider swings in 2018 than they did last year. For example, the S&P 500 Index has experienced moves of 1% in 28 of 70 trading days, or 40%, compared to just 8 of 251 days in 2017.
  • Looking further into 2018, we believe there are numerous additional sources of volatility, including potential inflationary pressures, global central bank deleveraging, fiscal and trade policy uncertainty and the potential for a more active Federal Reserve.
  • With these in mind, investors may be well served in preparing their portfolios for further volatility during the rest of the year.

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