Is the stock market more volatile than in the past? Many investors believe so based on the sharp intraday swings of recent days.
However, it really comes down to how you define volatility. If you look at the median monthly high-low ranges (in percent) for the S&P 500 index going back to 1980, and compare those averages to this year's values, only one month stands out so far.
In January, the range between the high and low was 13.70% (of the average of those two numbers), almost double the 7.60% monthly median going back 28 years.
The high-low range for this year's first month also topped previous highs of 13.09% in January 1987 and 12.62% in January 1980.
Despite the current choppiness, it seems that market conditions are not quite as wild as people believe they are. Of course, that doesn't mean there isn't plenty of intraday noise.
Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.
| |
Median | 2008 |
| Jan | 7.60% | 13.70% |
| Feb | 5.35% | 5.80% |
| Mar | 6.27% | 6.71% |
| Apr | 5.29% | |
| May | 6.18% | |
| Jun | 5.06% | |
| Jul | 5.31% | |
| Aug | 6.71% | |
| Sep | 5.74% | |
| Oct | 5.73% | |
| Nov | 6.11% | |
| Dec | 5.31% | |
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Reader Comments (Page 1 of 1)
3-20-2008 @ 5:48PM
william lindblad said...
Actually closing avg. after Jan. sell off has been around 12-3. Lotta bounce, but no real direction.