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Market Volatility: It's Not Unusual

The S&P 500 snapped back from a turbulent month, with a 7% gain from September 28th to October 9th. This followed on the markets largest down period of the year from July 20th to August 25th, when the S&P 500 dropped 12%.10.19.15

Are these up and down moves unusual? No, they are quite typical.

Reviewing the numbers from the past 20 years in the chart at right, most years have seen a fairly significant dip in the markets at some point during the year. This is despite the fact that in 15 of those 20 years, the total return for the year was positive. 2003 saw a 14% decline during the year, yet ended up 26% higher for the full year and 29% higher when you add the value of the dividends paid out to investors. Between April and August 2010, stocks were down 16%, but increased 13% for the full year (15% including dividends).

With the S&P 500 close to where it started the year, and two and half months left in 2015, the market could end higher or lower. However, with a solid dividend yield of 2.2% for S&P 500 stocks providing a head start for positive returns, and the market historically up more years than down, investors should not mistake a period of negative returns as a certain bear market, but as part of the up and down nature of the stock market and investing.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.
Investment Advisory Team
Hefren-Tillotson

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills.