You may have noticed larger price swings in the market over the last couple months. Another term for this is “volatility.”
Increasing volatility is normal as markets transition from up-trends (bull markets) to down-trends (bear markets). And, actually, large price swings IN BOTH DIRECTIONS are characteristic of bear markets.
Now, it’s reasonable to expect to see most of the worst daily returns in history during bear markets. However, what I found far more interesting when doing my analysis is that most of the best daily returns also occur during bear markets. In fact, eight out of the ten best days in the market (1950 – 2018) occurred during bear markets! Continue reading “Bigger Price Swings in Both Directions”