Special Update: Market Volatility
March 26, 2020
In the last month, we have seen some of the most volatile daily moves in market history. From two of the worst daily losses of all time on March 12th and March 16th, to astounding recovery days on March 13th and 24th. These moves rivaled famous trading days like October 19, 1987 (Black Monday) and October 29, 1929 (Black Tuesday). This Tuesday, March 24, saw the Dow Jones Industrial Average surge by +11.4%, its biggest daily gain since 1933.
If we scan the list of biggest daily moves, the largest loss days and the largest gain days all happen in the jaws of a bear market. We expect this for down days, but even the biggest up days have dates in the 1930s (Great Depression), 1987, 2008 (Financial Crisis), and now, 2020 (Coronavirus).
While we won’t complain about the big up days (and will only quietly grumble on the big down days), more important is looking forward to the base building of a new cycle, which will come at some point. October 2008, one of the most volatile periods in market history, gave way to March 2009 and the beginnings of the longest bull run in history. Are we beginning to build that base now, or will it be another 6+ months? Either way, we are comfortable with the quality of our holdings to wait it out.
While we deal with the current volatility, both good and bad, we encourage you to call in and discuss your portfolio. We can take advantage of the recent pullback to rebalance your accounts at attractive valuations. It’s also an ideal time to double check that the risk tolerance we use in your investment plan matches with how you’re feeling in this real-world bear market. Feel free to contact any one of our team members at (406) 839-2037 to have a conversation.