Yesterday’s 2% drop in the S&P 500 was painful for investors, but looking back at the historical data shows that it’s not a rare occurrence.
The market has been in a relentless bull market since it bottomed from the crash on March 9, 2009. But in that time the S&P 500 has finished the day down 2% or more on 55 trading days or about 1 out of every 20 days the market was open.
Going back even further you can see that since 1950 the market finishes down 2% or more quite often:
The S&P 500 has closed down 2% or worse in roughly 2 out of every 100 trading days while falling more than 1% almost 10% of the time. And almost 5% of all down days the market saw losses of 2% or more.
It’s also interesting to note from this data that on any given day the stock market is more or less a flip of the coin between rising or falling. On a daily basis the market was up 54% of the time and down 46% of the time.
Yet since 1950 the S&P 500 has compounded returns of 11.2% per year.
All of this is to say that large losses are inevitable in the stock market. It could be a sign of things to come or it could just be a natural phenomenon of a complex market.
The job for investors is to figure out whether the daily movements of the stock market matter for their portfolio or not.
Photo: Ahmad Nawawi
Recommended for You
Question: Last month I moved out of my apartment, and the landlord refused to do a walk-through inspection with me. He told me to just leave the keys on the kitchen counter. He then kept part of my security ...Los Angeles Times
- AdChoicesMONEY MORNINGSponsored
In a tell-all interview, CIA economist, Jim Rickards explains five catalysts that could send the American economy into a 25-year great depression.
When the undead threaten to turn your cerebrum to caviar, where do you run? A new study confirms what you might already suspect, and even offers a specific destination.>CNET
The former Florida governor was not exactly on friendly ground when he appeared at the annual gathering of conservatives held at National Harbor, on the banks of the Potomac outside Washington. For a day-and-a-half before his speech, for example, conservative radio host Laura Ingraham used her…The Fiscal Times
A smaller credit for people without children is available and can be worth up to $496.USA TODAY
Rep. Ken Buck, (R-CO), on President Obama’s executive action to ban AR-15 bullets.Fox Business Videos
They say bakery was profitable; woman wanted to spend more time with grandchildren.USA TODAY
Hyperinflation is an exponential rise in prices and tends to occur not when countries print too much money, but is instead associated with a collapse in the real underlying economy.Investopedia
This isn't your typical laptop announcement post. The most interesting thing about the Spectre x360, HP's new flagship notebook, isn't its design, performance or even price. No, what's interesting about ...Engadget
The latest images from NASA's Dawn spacecraft reveal a second mysterious bright spot on the surface of Ceres. Perhaps it's a giant Ceresian welcome sign?>CNET
Here's a list of handy, cheap and health-conscious options that may be just around the corner from you.USA TODAY
Here are five recent analyst stock picks in the small cap arena with shares under $10 but with big upside potential.24/7 Wall St.
MoneyPit.com founder Tom Kraeutler on the home-related deductions to reduce your tax bill.Fox Business Videos
LONG BEACH, Calif. (AP) — Gas prices are soaring in California in a classic example of supply and demand after an explosion stopped gasoline production at an Exxon Mobil refinery while another remains offline due to labor unrest.Associated Press
In Warren Buffett's 2014 letter to Berkshire...Business Insider
You may have heard of Montel Williams, actor, producer, and host of the long-running but now-defunct Montel Williams Show. You may also know that Williams is a spokesperson for Money Mutual, a lead generator ...Money
After lots of perseverance from smartphone makers, wireless charging is finally starting to make an impact. Many big name phones now support the technology and companies like Starbucks are helping to bring ...Engadget
Chicago drew closer to a fiscal free fall on Friday with a rating downgrade from Moody's Investors Service that could trigger the immediate termination of four interest-rate swap agreements, costing the city about $58 million and raising the prospect of more broken swaps contracts. The downgrade to…Reuters
In 31 states across the country, it costs more to send your infant to daycare than it does to send your child to a public university. What parents can do to prepare for the sticker shock of daycare.Yahoo Finance