Historical Analysis of Market Drawdowns
- As traders and professional prognosticators debate the odds of a hard, soft or no landing, the unspoken question remains: Is the market through the worst of it?
- This analysis of five-year returns following previous bear market drawdowns provides some context to help set expectations.
- The good news for long-term investors is that many recent drivers of short-term market swings may not matter over their time horizons – but there is likely to be additional volatility ahead.
- Investors seeking a smoother ride than the equity market may find low volatility index option-writing strategies to be a compelling alternative.
- Using index options for risk reduction and risk-adjusted return enhancement may appeal to risk-averse long-term investors who are no longer satisfied with what the bond market has to offer.