Market Volatility Is Normal

Stock market ups and downs are not new. Data shared by Charlie Bilello shows that whenever there is volatility in the market, there are both down days and up days. This data is based on almost 100 years of history of the S&P 500.

The main message is simple. When there is a sharp fall, there is also a sharp rally. When there is a strong rally, a fall can follow. This cycle keeps repeating.

Big Moves Happen Every Year

The data looks at how many days in a year the market moved more than 1% up or more than 1% down. These are not small moves. These are strong days. In some years during the 1930s, there were 97 down days and 69 up days. In another year, there were 95 down days and 86 up days. This shows that big swings were very common.

What Happened in 2008 and 2011

If we look at 2008, there were 75 days when the market fell more than 1% and 59 days when it rose more than 1%. In 2011, there were 48 down days and 48 up days. These numbers clearly show that strong moves in both directions are part of the market. You cannot expect only positive days.

Recent Years Tell the Same Story

The same pattern was seen during COVID. In that period, there were 45 days of more than 1% drop and 64 days of more than 1% rise. In 2022, there were 63 down days and 59 up days. Even in recent times, the market has shown sharp falls and sharp recoveries. Nothing has really changed.

Gain Comes With Pain

Market volatility is part and parcel of investing. If you want to earn money in the stock market, you cannot avoid down days. To earn gains, you must accept some pain. The key is to have a strong plan. As long as your strategy can handle these ups and downs and you do not get stuck in panic, there is no need to fear. With the right plan, market falls become manageable and long-term success becomes possible.