September 1st, 2015 | Market Update
Week in Review
Investors were taken on a historic ride last week with big moves in both directions. Volatility, as measured by the VVIX, doubled for a brief time on Monday and hit an all time high. The three day sum of the S&P 500's price distance from it's 50 day moving average was 14.07 standard deviations, a number not seen since the Blitzkrieg in May of 1940!
Last week also brought the two best and worst days for the market since the bull market began in 2009. All of this volatility pressed most global equity markets into correction territory, though many were able to finish the week in the black.
What to WatchContinued volatility is to be expected, for those who are far from retirement this volatility is merely a nuisance. However, for those near retirement or in retirement "sequence risk" becomes the primary concern. Sequence risk is the risk of compounding ones losses by withdrawing money before one's investments have recovered their original value. The Wall Street Journal recently wrote a great article for investors regarding sequence risk and the current market. You can read that article here.
Many investors are expecting additional volatility over the coming weeks. Some events that may trigger additionally volatility, include:
- September 1-4th, Economic Reports (Jobs, Manufacturing, Trade)
- September 16-17th, FOMC Meeting
- September 20th, Greece Elections
Bloomberg.com chart of the S&P 500, 8/5 through 8/31.