Last Friday after US stock markets closed I went to check the performance of the portfolio and meanwhile saw some headlines for business and general online papers: “Worst day of 2012“.
I didn’t feel that the day had been especially bad regarding stock markets. Both the Dow Jones and S&P 500 fell -0.69%, which indeed had been the worst day so far in 2012, but so far both indices had returned over 7.5% and 5.5% in the first 5 weeks of the year. So, I guess that what wasn’t the norm was the positive trend with only about 3-4 bad days so far.
I went further and compared the -0.69% to 2011 numbers, in this case only with S&P 500.
How many days did the index go below -0.69% in 2011?
64 days out of 252 trading days, that is 25% of the time. The index went up more than +0.69% for other 67 days (27% of the time). It went down but less than -0.69%, 51 days and up but less than +0.69%, 70 days. Quite an even distribution.
So, compared to 2011, a market move of 0.69%, up or down, was rather the average. During the whole year the S&P 500 returned barely 0%, so it’s true that 2011 wasn’t a particular good year, and it was as well especially volatile, indeed the average move along the year was ~1.04% and the median was 0.74%, either positive or negative.
This is just to point something not new: Mr. Market’s moves coupled with media hype aren’t good companions for taking investing decisions.