Day 163: Reflections on 2022 Market Volatility

I heard a podcast, Ben Carlson’s “Portfolio Rescue,” discussing the frequency of high-volatility days in the market this year. I don’t remember the exact stats, but basically, there have been a lot of days this year–a lot more than usual– where the market gained or lost 2% or more. This squares with my experience: since I started investing in 2015, the only other time I remember so many swings was during the beginning of the Pandemic in early 2020.

Anyway, I found it helpful hearing about this aspect of the 2022 market volatility. It’s like being told that, yes, you just went through an extremely bumpy ride in your Jeep. That’s why you were flying three feet in the air! With this year’s continuous gyrations, it was easy not to see the forest for the trees. It’s kind of nice for someone to come along and say, “Yep, this was an extremely bumpy year, as demonstrated by all these days in which things moved up or down by over 1%.”

It’s nice to be reminded that things aren’t usually THIS bumpy. As I said, other than 2020, so far in my investing experience, the ride was, if not smooth, then consistently aimed upward. I’m not saying I expect that always to happen, but in the 2015-2021 period, not withstanding the Pandemic crash, there was an overwhelmingly consistent upward trajectory. This year, it’s really been hard to know what to make of things.

The answer is that things have been volatile. It’s all in the word. Up and down and swinging all around. Sure, it makes for a bumpy ride. Yet this is what the financial writers have been preparing me for ever since I started reading about investing. You don’t have to like it. But when you are investing for the long term, there will be times like this.

Hang on, things can get bumpy!

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