Ben Carlson, Columnist

The Becalming of Stock Volatility

Remember that markets have ups and downs.

February 8, 2017 at 4:47 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."

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Markets have been eerily calm. It’s now been 40 trading days since the last move of 1 percent in the S&P 500, and that was an up day. Stocks haven’t had a down day of 1 percent in more than 80 trading days -- and that was in early October.

This period of subdued volatility extends beyond the past few months. Volatility in stocks has been below average in the past few years. The annualized volatility of the daily returns on the S&P 500 from 1930 to 2016 is around 19 percent. In 2008, this number shot up well above 40 percent, which was the highest level of volatility we’ve seen since the Great Depression. Volatility continued to be above average in 2009 and 2011. Since then, however, there’s been a severe drop-off every year.