The Constant Reminder

One of the benefits, maybe the only benefit of watching the market as closely as I do, being that I’m not an active trader, is that I’m constantly reminded that I have no idea what’s going to happen.

The S&P 500 (total return) has experienced eight straight years of gains. It’s been five and a half years since a 20% decline. The CAPE ratio is at 28. And a new administration entered the White House. Coming into 2017, I don’t think many people would have predicted we’d experience below-average volatility in the stock market.

For the first half of the year, the average absolute daily price change, meaning all negative signs are removed, is just 0.32%. If the year ended today, this would be the smallest daily price change since 1965! It’s hard to imagine a period in which there’s been such a wide gap between daily political volatility and daily stock market volatility.


Not only has the market been incredibly quiet, but it has also been incredibly resilient. The S&P 500 has been within 5% of its all-time high for 261 straight days. The last time it was more than 5% away was July 27, 2016. That lasted one day. So going back to March 2016, the S&P 500 has been within 5% of its all-time high for 332 out of 333 days.

Investors have had it easy for the last year and a half. Sure there have been external distractions and reasons to be cautious, but in terms of the market itself, it has been a relative walk in the park. This could change at any time of course, and in fact I would expect it to. It’s hard to imagine the seas staying this calm for much longer, so make sure your portfolio is ready for when things get a little bit bumpy.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.