A graphical view of volatility

By Morningstar Analysts |  22-06-18 | 

John Rekenthaler, Morningstar’s vice president of research, recently wrote a post on the current bull run.

This may not be the best stock bull market in modern U.S. investment history; the 1950s and 1990s are formidable rivals. By any standards, though, tripling one's money in real terms, in less than a decade, rates as a great success. That this gain occurred during a period of low volatility, with few large reversals and subdued inflation, heightens the achievement.

Ben Johnson, Morningstar’s global director of manager research for passive strategies, did some digging up.

While the market has hit a pothole or two during the current bull run, the ride has generally been smooth. I've plotted the trailing 3-year standard deviation of the S&P 500 from March 1939 through the end of April 2018.

This measure of stock market volatility has been trending below its long-term average for 68 months. This marks the third-longest stretch of below-average volatility for the index dating back to 1939. The next-longest period lasted 75 months, from March 1956 through May 1962. So the current streak is unprecedented in the experience of most investors.

ben johnson

We looked at data for India with regards to the Sensex and Nifty.



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