You may not feel like being congratulated, but congratulations are in order. You have managed to live through the worst first quarter on record in the U.S. investment markets.
You also endured the fastest, longest, hardest roller coaster ride in market history, as measured by the VIX volatility index. Basically, that means that one day the markets were down at record or near-record levels, and then as we thought perhaps the bear market would continue, we experienced near-record one-day gains.
The previous record for instability in the stock market was an eight day stretch in November of 2008, when the markets seemed to be gyrating up and down uncontrollably after traders realized the full implications of the collapse of Lehman Brothers. At the end of this recent first quarter, the CBOE Volatility Index (VIX), presented us with a record 10-day run with the index above 60. (The long-term average for marketing volatility, as measured by the VIX index, is 20.)
Just about every asset class outside of bonds saw declines in 2020’s disastrous first quarter.
You don’t have to ask why Wall Street traders are abandoning stocks in near panic mode. The coronavirus epidemic, social distancing and the closure of home offices, malls, theaters and anywhere else where people once gathered to work has raised uncertainty about the extent of business disruption in the U.S. and world economies. Unemployment has sky-rocketed, with record numbers of people applying for unemployment benefits.
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