There were 22 trading days in March of 2020.

Just one day out of those 22 saw a move of less than plus or minus 1%.

Every other day saw a large move including 8 days of down 3% or worse and 8 days of up 3% or better. These were the daily returns during that fateful month:

It felt like a year’s worth of volatility in a single month.¹ It was one of the most volatile months in stock market history, right up there with the murderer’s row in the 1930s.²

The S&P 500 finished the month down more than 12%. At the worst of the downturn, stocks were down 34% from the February highs just weeks before.

One of the craziest things about this whole ordeal is that the market finished the year up 18%. I don’t have to recount the reasons why. It wasn’t that long ago.

Insane volatility with wonderful returns is the story of the 2020s. This decade is on pace for the most +/-1% days in a decade over the past 8 decades:

It wouldn’t shock me if we break the 2000s record.

But remember, the annualized return in the first decade of the 21st century was a loss of -1%. The volatility in the 2000s made sense in the context of poor returns, which is typically what happens.

Bad things tend to happen during bad markets.

Although this decade has seen a lot of bad things happen, the S&P 500 is still up nearly 14% on an annualized basis for the 2020s.

It feels like we go through some crazy situation, then investors freak out a little, the market nose dives but then everyone forgets about it and moves on like a case of financial amnesia.

Think about all the stuff we’ve gone through this decade — the pandemic, the meme stock craze, 9% inflation, the Fed jacking up rates from 0% to 5% in a hurry, the Silicon Valley mini banking panic, the Yen carry trade blow out, Liberation Day and a bunch of other stuff I’m forgetting.³

The booms and busts are happening faster than ever yet the market continues to charge higher.

Now we have a situation where the United States just bombed Iran.

Will this lead to another bout of volatility where investors completely forget about it a month later?

Possibly. We’ll see.

I just find it interesting how the market is behaving this cycle.

Markets are extremely volatile yet they just keep going up. Investors care about what’s going on in the moment but then move on immediately, like some sort of high school relationship you weren’t really into. In the information age it seems like the market only has the bandwidth to care about one event at a time.

This won’t last forever.

Returns will be below average for a period of time or we’ll have another financial crisis or recession or something to change the psyche of investors.

For now, volatility, booms, and amnesia reign.

One of the keys to successful long-term investing is the ability to follow your investment plan despite scary headlines.

This decade it’s working.

Further Reading:
Pandemic Babies & a Bull Market in Risk

¹And this was bookended by 3 down days of 3% at the tailend of February along with a +2%, +7% and +3% in the first week of April. And then we were off to the races.

²The 1930s are in a class of their own.

³See I have financial amnesia too.