Take a close look at the chart below. For long-time TGIF 2 Minutes readers, it is that time again! For new readers, enjoy “The Greatest Chart Ever”*: Continue reading “Understanding 2026 Market Volatility”
Tag: Volatility
This May Take a While
It is time again for “the Greatest Chart Ever”.* And to extend the expression, often “the greatest” takes a while to develop.
The current situation that may take a while is tariff policy by the US with respect to trading partners. Tariffs are in effect for barely one week. Markets in short order have punished stock prices and caused heavy volatility in US Treasuries. Most of the volatility is due to uncertainty on a large scale about how and how much tariffs will affect availability, demand and end prices for consumer and industrial goods globally. That is a massive amount of goods and only time will tell. Stock markets do not like uncertainty – even if the eventual goal is to make a positive difference.
Are Markets Ready for Tariffs?
Part of me needs to admit that today’s title was an attention grabber. The deeper questions are:
- Are investors ready for volatility?
- Are investor expectations ready for a test of high stock valuations?
- As always, do investors have enough cash for spending priorities and wishes?
- Are investors ready to take advantage of any coming volatility with savings strategies (think: being able to continue regular contributions to savings & investments, 401k plans and IRA accounts)?
Rocky (But Good) Start to the Year… PS. “Alts”
This may be the last weekend we can say, “Happy New Year!” to friends. And a fairly happy new year it has been for the markets… with a few bumps here and there. The “bump” was a mini-cavernous plunge for shares of Nvidia shares, down 15% in one day without a rebound. Both the S&P 500 and Nasdaq 100 (tech focused index) promptly rebounded.
However, there may have been a few investors, especially those newer to the markets or those less patient among us, who need a “gut check” when markets get rocky. Here are a handful of questions investors can ask themselves, in order to stay put with current investments in down and seriously down markets – providing a plan is already in place:
Continue reading “Rocky (But Good) Start to the Year… PS. “Alts””
Bitcoin 2024
This edition of TGIF 2 Minutes will make a brief attempt at summarizing Bitcoin’s recent meteoric rise to around $95,000. There is still a huge segment of the population who might ask, “$95,000 for what?”. At the same time, Bitcoin has increasingly become an accepted form of currency, although in limited and illiquid ways.
One of the more obvious and possibly over-done in the short-term reasons for Bitcoin’s price rise has been the run-up to and aftermath of the recent US presidential election. Investors seem to expect in the near future a more friendly regulatory environment for cryptocurrencies overall.
Greatest Chart Ever 2024
It’s time for “The Greatest Chart Ever”, updated for 2024.
Please make sure the chart above shows on your screen! If not, please ask me to email you a copy.
Long-time TGIF 2 Minutes readers know this particular chart truly is a great chart* with data illustrating reasons to invest in stocks – and stay invested – for the short-, intermediate- and especially long-term. The information focuses on US stocks, namely the S&P 500, and lends to globally diversified stock investing, as well.
“The Greatest Chart Ever” offers needed perspective in times of volatility and uncertainty. Over a period of more than 40 years of intra-year stock market performance, the chart illustrates valid reasons NOT to allow short-term market moves (monthly, quarterly – or even yearly) to lead to poor investment decisions. Why? Please read on.
Checklist for Down Markets
How did it feel in both 2015 and 2016 when for the entire month of January, the stock markets (the S&P 500) started the year DOWN 3.1% and down 5.1%, respectively? Isn’t January supposed to be an UP month? It did not feel great then and it doesn’t feel great at any time in the year.
The following is a worthwhile commentary and check list (from a 2014 edition of TGIF 2 Minutes) that can serve as a “gut check” for investing when markets experience months or longer periods of meaningful declines. Even if you have read these before, consider reviewing again for perspective and direction.
Lack of Clarity = Volatility
Markets prefer certainty. In times of relative economic certainty, market trends can be more defined and steadier. In times of economic uncertainty, markets react with volatility similar to the past 6 to 7 months. Two simple pieces of data:
- The 10-year US Treasury yield was as high as 5.0% in late-October, then as low as 3.79% just after Christmas, then back up to 4.28% in March and very recently higher to 4.68% a mere few days ago. These levels – and the speed with which they have changed – represent fairly massive volatility based on historical 10-year US Treasury rates.
- In the US stock markets, there has been similar volatility in both small-company indexes and the larger-company S&P 500 since last year with a noticeably weak 3Q 2023 and then all-time highs taking place just this past April 2024.
Time for The Greatest Chart Ever
A chart for the ages, nicknamed over the years “The Greatest Chart Ever”*.
Please make sure the chart above shows on your screen! If not, please ask me to email you a copy.
Simply put, the chart summarizes the inevitable volatility that stocks experience year-in and year-out, while still producing intermediate- and long-term positive returns. Last week’s TGIF 2 Minutes touched on similar concepts related to sticking with a 60/40 portfolio.
Crypto Quarterly 2Q 2023
On balance, the news regarding cryptocurrency is still fairly skewed to the negative. But crypto remains alive, although widely a mystery to most of the population (including yours truly). Reporting on crypto is thus difficult – but even a small amount of information can be worthwhile.
One of the key events of the tragic crypto downturn remains the November 2022 fall of FTX and arrest of its founder. Interest rate increases also gradually revealed weaknesses in various cryptocurrency exchanges and functionality.
