Escalator Up, Elevator Down

by | Feb 14, 2019 | Newsletters

By Aaron CFP®, Managing Director

“Escalator up, Elevator down” is a good metaphor to describe movements in the stock markets.

On September 20, 2018 the S&P 500 Index peaked at 2930.  The index gained approximately 17% over the previous 12-month period.   It took only three months to wipe out that gain.

We can sometimes forget that stock markets are volatile (as described in detail in our October 30, 2018 post That Was Fast! by Stephen Greco, CEO).  2018 was an average year for volatility but it seemed worse because 2017 was unusually calm.  The standard deviation (a measurement of volatility, for those of us who didn’t fall asleep in statistics class) for the S&P 500 Index from 1926 – 2017 is 18.7%;[1]  in 2017 it was a mere 6.7%.[2]

It can be a challenge for us to ignore short-term fluctuations with around-the-clock investment news but it is important to keep your focus on long-term results.  Speak with your Wealth Manager about how volatility affects your investment portfolio and your long-term financial plan.

 

 

[1] See: DST Systems Inc. (n.d.). Evaluating Investment Risk at http://fc.standardandpoors.com/sites/client/generic/axa/axa4/Article.vm?topic=5991&siteContent=8088

[2] See: Forbes (December 12, 2018). Market Volatility: A Return To The Old Normal at https://www.forbes.com/sites/sarahhansen/2018/12/12/market-volatility/#4e346efd71f0

Aaron Kirsch CFP®, Managing Director

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Escalator Up, Elevator Down

by | Feb 14, 2019 | Newsletters

By Aaron CFP®, Managing Director

“Escalator up, Elevator down” is a good metaphor to describe movements in the stock markets.

On September 20, 2018 the S&P 500 Index peaked at 2930.  The index gained approximately 17% over the previous 12-month period.   It took only three months to wipe out that gain.

We can sometimes forget that stock markets are volatile (as described in detail in our October 30, 2018 post That Was Fast! by Stephen Greco, CEO).  2018 was an average year for volatility but it seemed worse because 2017 was unusually calm.  The standard deviation (a measurement of volatility, for those of us who didn’t fall asleep in statistics class) for the S&P 500 Index from 1926 – 2017 is 18.7%;[1]  in 2017 it was a mere 6.7%.[2]

It can be a challenge for us to ignore short-term fluctuations with around-the-clock investment news but it is important to keep your focus on long-term results.  Speak with your Wealth Manager about how volatility affects your investment portfolio and your long-term financial plan.

 

 

[1] See: DST Systems Inc. (n.d.). Evaluating Investment Risk at http://fc.standardandpoors.com/sites/client/generic/axa/axa4/Article.vm?topic=5991&siteContent=8088

[2] See: Forbes (December 12, 2018). Market Volatility: A Return To The Old Normal at https://www.forbes.com/sites/sarahhansen/2018/12/12/market-volatility/#4e346efd71f0