On Stock Market Volatility

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Putting it All into Perspective
By Sean G. Todd, Esq., M. Tax, CFP, CPA

The US stock market has taken investors on a bumpy ride in recent years. This volatility has tested investor discipline and prompted some doctors to question their commitment to equities. While no one knows the future, looking at the past may help you gain a better view of long-term market performance and put the recent market volatility in perspective.

Historical Performance

The historical distribution of US market returns since 1926 tells us that performance years are stacked in ascending order by return range. For example:

  • Market performance over the past two years has been extreme by historical standards. In 2008, US stocks experienced their second-worst calendar return in eighty-four years. Then, in 2009, stocks rebounded strongly to deliver a return in the top quartile of the historical distribution.
  • Over the long term, the market’s positive return years have outnumbered the negative return years. Since 1926, the market has experienced a positive return in almost three-quarters of the calendar years.
  • Not only are the positive years more numerous, there is a larger concentration of performance in the higher ranges of returns.
  • The sequence of calendar returns appears random, suggesting that accurately predicting future performance is a difficult task for any investor, physician or professional manager.

UPDATE: https://money.cnn.com/data/markets


Over time, the market has rewarded investors who can bear the risk of stocks and stay committed through various periods of performance. And, professional counsel and advice goes a long way in helping you develop, implement and maintain your strategy.


The recent extreme market volatility has challenged many physician investors to rethink their investment strategy or to prompt them to initiate an investment strategy. And so, your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe. It is fast, free and secure.


Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com


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4 Responses

  1. Stock Pickers Lose Out To Index Funds

    Just saw this post and thought other ME-P readers might enjoy it.

    It seems that among mutual funds, the pain from the recent market downturn was felt far and wide–but not shared equally.


    Indexing wins … Indexing wins!



  2. Market Volatility

    If it seems like every financial advisor is talking about October’s spike in market volatility, it’s because they are.


    How about you, doctor?



  3. Volatility – Say What?

    A great week for Wall Street, stock traders and brokers. But, a yawn for the informed investor.

    Dr. Braxton


  4. The upside of market corrections

    Though the market’s correction may have been unsettling for investors, we believe times like these reflect a healthy rebalancing where investment moves away from overbuilt segments of the market and into other segments potentially more representative of future opportunities.

    However, corrections can be a temporary set-back for investor wealth and dent consumer psychology. Corrections also reflect a shift in momentum that may take some time to transition; contributing to uncertainty and suggesting market volatility could persist in the near-term.

    In a way, financial corrections are analogous to the last play before a quarterback is sent to the bench. It is in that last play that a struggling starter often gives up an interception for a touchdown; a big setback, but not always defining the end of the game.

    Daniel J. Antokal
    [Financial Advisor]


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