We have just lived through quite a historical market event! It is very rare to have a period with such low amounts of volatility in stock market prices. Yesterday, the US stock market (S&P 500) ended its streak at 64 for the number of days without a 1% intraday move. The previous record was 34 days back in the mid-1990s.
Another cocktail party tidbit: 109 days ago in October was the last time the S&P 500 closed more than 1% lower than its previous day’s closing price. This nearly equaled the 1995 streak of 110 days.
One prediction that I am fairly confident about for the rest of 2017 is that stock market prices will correct. Why? Let’s take a look at history. Generally, we see three or four 5%+ pull backs each year. Also, it is pretty common for a 10%+ correction during the year. In fact, the average decline during a calendar year is over 14%. A full fledge bear market where stocks lose 20% or more happens on average once every 3.5 years.
Sources: JP Morgan Asset Management, Standard & Poor’s, Ned Davis Research
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