Ben Carlson, Columnist

These Kinds of Stock-Market Losses Aren't That Unusual

Daily dips of 2 percent or worse occur a little more than five times a year, on average.

February 6, 2018 at 4:29 PM UTC

Ben Carlson is director of institutional asset management at Ritholtz Wealth Management. He is the author of "Organizational Alpha: How to Add Value in Institutional Asset Management."

Along for the ride.
Photographer: Michael Nagle/Getty Images

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The stunning lack of volatility or losses in the market in 2017 and the beginning of this year appears to be over. Declines in excess of 2 percent on Feb. 2 and of 4 percent on Monday essentially wiped out those gains. Overnight futures were down sharply, but on Tuesday the market went from huge reversals from losses to gains and back to losses again.

It may not feel like the end of an era because markets have been so calm in recent years, but these types of selloffs should be expected in the stock market from time to time. This table shows the distribution of daily gains and losses for the S&P 500 going back to 1950: