If someone had told you on January 1st that the year would start off with fears of an economic recession in the US as Retail Sales showed their largest decline since 2009, and then that the US would be in a trade war with China where at one point the President ordered all US companies to start looking for an alternative to doing business in that country, you would have thought that 2019 would likely end up being a pretty volatile year. As if these two headwinds weren’t enough, add to them that the President would have been impeached towards year-end, and you may have even asked, “How bad was the bear market going to be?”

Well, there was no bear market in 2019, and for that matter, there wasn’t even a correction! The chart below shows the maximum drawdown of the S&P 500 from a closing high for each calendar year since 1928. The average drawdown in a given year during this span has been a decline of 16.3%, and in 58 of the 92 years, there has been a decline of at least 10%. While years with a drawdown of at least 10% aren’t uncommon, and this year there has been no shortage of potential headwinds, the maximum drawdown for 2019 has been less than 7%! While this year has been tame, don’t forget that last year, the S&P 500 saw a drawdown of 19.8% on a closing basis as many of the headwinds we faced early on in 2019 were already priced in by the end of 2018.