Sam Stovall, Chief Insight officer at CFRA Research, explains why the market volatility isn’t over.
Transcript:
Sam Stovall: Because of the weakness that the market has seen thus far since February 19 peak, I think that investors should brace for additional volatility. In the first year of a president’s term in office, whether it’s the first term or second term we traditionally see elevated volatility with most, with the drawdowns averaging more than 15% for Republican presidents versus 10% for Democratic presidents.
So I would also say that because we are in the third year of a bull market and I call bull markets. You know the tumultuous 3’s because traditionally we find that a lot of bull markets don’t make it to the end of the third year. And as a result, we see a pickup in volatility and a reduction in the average price advance. So I would tend to say that while 2025 is still likely to post a low single digit price appreciation, I think there will be a lot of volatility to go along with it.
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