Bridge over ocean
1 November 1995 Financial Analysts Journal Volume 51, Issue 6

Is the Stock Market More Stable than It Used to Be?

  1. Edward F. Renshaw

Evidence with regard to annual trading ranges, financial returns, and fluctuations in the S&P stock price index supports the hypothesis that the market is more stable than it used to be. Among the possible reasons are a more stable economy, its changing structure, the invention of portfolio balance models, and the globalization of the securities market. The unanswered question is whether inexperienced investors have now set the stage for an old-fashioned boom to be followed by a crash that will end the most prolonged new-high bull market without a correction of 9 percent or more in the history of the S&P index.

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