Big Market Days
Friday 18th November 2022
Katy Baxter
When we've had a year in markets like 2022, it can be tough to work out how normal/abnormal it has been - or how we should be feeling.
One way is to count how many days there have been where the market moved - up or down - by more than 1%. We can call these BMDs (Big Market Days) for lack of a better phrase.
The chart shows that count of days. Also highlighted in orange are those days where the move was more than 2%, and red those days where it was more than 3%. (This uses the US equity market because the data is more easily available)
Back to the question: "how abnormal has it been?"
So far this year we've had 105 BMDs. How does that stack up (bearing in mind we've still got two months to go)?
• 2022 definitely isn't normal. The long term AVERAGE is 52.5 BMDs, so 2022 has already been twice as crazy as average.
• This has been the sixth "craziest" year since 1953. The others were 2020, 2009, 2008, 2002 and 1974.
• This is similar to COVID. In 2020 there were 109 BMDs. Although we should note that in 2020 there were 10 days where the market moved more than 5% (!), and we've had none of those so far this year.
• Market madness doesn't necessarily subside quickly. 2008 had 139 BMDS. Worst ever. But then 2009 had 117 ...
So although this may not give any comfort about when it might end - at least you know it's completely ok to be reeling from what's going on. It is also important to remain in a well diversified portfolio and being invested in multi-asset funds can soften the impact of such big swings in equity prices.