Wall Street’s Targets For The S&P 500 And The 10-Year Yield for 2014

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Here’s A Look At Each Year’s Big Stock Market Sell-Off Since 1980

So far, 2014 has been a volatile year for the stock market. The S&P 500 has gone from its all-time high of 1,850 on January 15 to a low of 1,737 on  Wednesday. This is a brutal 6.1% intra-year decline. For the year, the S&P 500 is no  down 5.2%. However, these big intra-year drops are very typical of the markets.

Check out this chart from JP Morgan Funds’ David Kelly. According to Kelly’s  research, the average annual intra-year drop since 1980 is a whopping  14.4%. This makes this year’s sell-off look minuscule. More importantly, annual returns during these years have been positive 26 out  of 34 times. Yes, the recent volatility hurts. But it’s no reason to freak out.

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How Hard Is It To Pick Winners In The Commodities Market?

2013 was a really terrible year for commodities, as flagging  demand worldwide ate into prices. Just four major commodities – natural gas, oil, palladium and,  barely, zinc saw year-over-year price gains, according to the “commodities  quilt” below from U.S. Funds. Growth  in the top performer, natgas, which climbed 33%, diverged 66% from the worst  performer, corn, which fell 23%.

That may seem extreme, but it’s  been worse: in 2006, the disparity was almost 200 percent between winning nickel  and losing natural gas. It’s also importants to  recognize that annual returns for each commodity can be quite volatile. That’s  why the pattern of colors in the quilt is so chaotic. “The price movement of commodities is historically both seasonal and cyclical,” wrote the folks at U.S. Funds. “That’s why when investing in natural  resources, we believe it is important for your portfolio to hold a diversified  basket of commodities and to be actively managed by professionals who understand  these specialized assets and the global trends impacting them.”

commodities quilt

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