To make money in the capital markets, you have to take risk!
That is, to some extent, accept volatility and drawdowns (during the daily mark-to-market process). Figure 1 shows all S&P500 drawdowns since the March 2009 bottom (based on daily closing prices). There were 29 total declines above 5%.
Table 1 shows the details.
This means that declines above 5% occur every 202 days, and declines above 10% every 731 days.
Figure 2 shows the dates of future declines above 5% 😊. There will be many of them.. business as usual.
Figure 3 shows drawdowns above 10%, and Figure 4… above 20%.
Interestingly, based on the 202 days cadence between declines above 5%.. the next such decline was supposed to happen in February 2025! That’s 202 days since the last such decline which started on July 16, 2024.
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