The S&P 500's maximum drawdown this year is only 4.2% (closing basis). Going back to 1928 only 3 years have had a smoother ride than 2021: 1964 (-3.5%), 1995 (-2.5%), and 2017 (-2.8%). $SPX pic.twitter.com/zYivZiqy3N
— Charlie Bilello (@charliebilello) September 9, 2021
Today’s Chart of the Day was shared by Charlie Bilello (@charliebilello). The table shows the maximum drawdown for the S&P 500 in each year going back to 1928. The S&P 500 fell for the fourth consecutive day today, and yet we’re less than 1% off of an all-time high. This year has been a steady bleed higher with very little downside volatility. In an average year, the S&P 500 experiences about three pullbacks of 5% or more. The largest decline we’ve seen this year has been 4.2% on a closing basis. Charlie points out that only three other years have seen a smoother ride than 2021 – 1964, 1995, and 2017. While this unusual market environment is an investor’s dream, it’s extremely important that we don’t get complacent, and forget about potential downside risk.