Investors beware: More volatility ahead

Sam Stovall, Chief Insight officer at CFRA Research, explains why the market volatility isn’t over.

Transcript

00:00Well, because of the weakness that the market has seen thus far since February 19th peak,

00:06I think that investors should brace for additional volatility.

00:10In the first year of a president's term in office, whether it's the first term or second term,

00:16we traditionally see elevated volatility with the drawdowns averaging more than 15%

00:26for Republican presidents versus 10% for Democratic presidents.

00:31So I would also say that because we are in the third year of a bull market,

00:36and I call bull markets the tumultuous threes,

00:41because traditionally we find that a lot of bull markets don't make it to the end of the third year.

00:48And as a result, we see a pickup in volatility and a reduction in the average price advance.

00:54So I would tend to say that while 2025 is still likely to post a low single digit price appreciation,

01:02I think there will be a lot of volatility to go along with it.