4-22-25: Make Market Volatility Your Friend

by Jason Bodner

April 22, 2025

It’s been a volatile year thus far – one of the highest on record. Upon that, I think we can all agree.

There are, however, many ways to measure and describe volatility.

• The media misleads us by calling price declines “losses.” Price volatility is normal. The S&P 500 is down 10.18% since the start of the year, but it is up 6% in the last seven trading sessions. It is important to point out that the news media loves to stoke fear and worry, which leads to more viewers seeing their advertisements. Advertising is their lifeblood; their revenue model. That is why the media will word a big down day in the market in terms of “losses” to wealth or profits:

  “Losses Wipe Out All Post-Election Gains for the S&P 500” – AP headline

  Notice, they say “losses” instead of price declines, so I’ll remind you – a stock position is never a loss until it is realized. If you own a stock, you don’t lose any money until you sell it at a loss.

• • Another measure of volatility is average daily performance. The average return (up or down) is 0.76% on any given day, based on the 24,465 trading days observed since January 1, 1928. But the average daily move so far this year is much higher, at 1.11%. The net gain or loss varies each year. The average of each day’s move on the S&P 500 since this year began (73 trading days) is -0.13%. That doesn’t look so bad, although a negative daily average isn’t any fun in the long run. For context, the average daily move since January 1, 1928 is +0.03%, but that tiny positive daily gain translates to a stunning +29,645% gain in 97+ years. This is a great example of how about 30,000 baby steps can take you very far if you have nothing but time on your hands.
  • The worst pain this year happened in less than a week (April 2-8), down 12.1%. Since then, we’re up 6%. As I write, the S&P 500 has fallen 14% from its peak and about 6% so far in April.
  • One month on the calendar averages 20 trading days. The 20-day absolute average daily move is 1.80% vs. an historic average of 0.76%, and the S&P 500 has fallen 6.8% in the last 20 days.
  • Since President Trump announced his Liberation Day plans in the Rose Garden on April 2^nd (he must have wanted to avoid any April Fool’s Day connections), the average absolute daily move for the S&P 500 has been 2.8%. That’s 3.7 times more volatile than the 97-year average.