A brief history of market panics

SPONSORED CONTENT - The coronavirus outbreak is just the latest case in the long history of market volatility.

History suggests that every once in a while, markets and investors panic. The frequency of these panics is clearly unpredictable – as they are usually caused by unpredictable events – but outbreaks of extreme market turbulence tend to pop up every few years. Recent events connected to the coronavirus outbreak are just the latest manifestation of a surge in what’s called market volatility.

This is a technical-sounding term which measures the ebb and flow of markets, usually (though not exclusively) the US market, as captured by the S&P 500 index. The main index of volatility in the US is called the Vix. For context, most of the time this index is somewhere in a range between 10 and 20. But on 12 March 2020 – at the height of the most recent panic – this measure spiked above 80 to 82.62. That was a jump of nearly 25 index points in just one extraordinary day.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.