In 2018, the re-emergence of volatility took many market participants by surprise.
After all, aside from a few smaller, intermittent spikes over the course of the current bull market, volatility has largely been in a long-term downtrend since the aftermath of the 2008 Financial Crisis.
Whether there is more volatility lurking ahead this year or whether the markets continue to calm, it’s worth looking at the last century of market history to put these recent bouts of volatility into context.
Learning From the History of Markets
Today’s infographic comes to us from New York Life Investments and it goes back in time to show us that the volatility experienced in 2018 was neither exceptional or unusual.
Here are five important lessons to learn from it all:
With volatility back on the table again, investors are re-learning what it’s like to cope with a sometimes tumultuous market.
Higher volatility can be a source of uncertainty for even the most seasoned investors, but a look at historical data over the last century helps to ease these concerns.
5 Lessons About Volatility
Here are five lessons about volatility that we can learn from the history of markets:
Lesson #1: Volatility isn’t new
Volatility isn’t a new phenomenon – and it’s actually as old as the stock market itself. In fact, if you look at historical swings in the Dow Jones Industrial Average, you’ll see that many of the biggest ones were more than 80 years ago.
Lesson #2: Volatility is actually the status quo
In the last century, volatility has been ever-present in the markets, and between 1935 and 2018 the S&P 500 has seen:
- 4,563 total days with +/- 1% price movements
- 1,094 total days with +/- 2% price movements
That works out roughly to a 1% price swing every trading week – and a 2% price swing every month. Yet, over this lengthy time period, and after all of that volatility, the S&P 500 has grown by 25,290%.
Lesson #3: Any short-term volatility disappears with a long-term view
Daily price swings can feel like a roller coaster. But if you take a step back and look at the big picture, this volatility is just a blip on the radar.
For example, if you look at a chart of the S&P 500 from August 1990 to February of 1991, you’ll see that daily volatility was rampant. But zoom out to a 10-year chart, and these daily or weekly swings are barely noticeable.
Lesson #4: Volatility can be easily weathered with a resilient portfolio
Given that volatility has been around forever and that it’s extremely common, that makes it fairly unavoidable. Therefore, to weather periods of volatility, it is imperative to build a resilient portfolio by diversifying between different asset classes.
Certain assets are better at weathering periods of volatility than others. Here are some traits to look for:
(a) Low correlation with the market
These assets can zig when others zag, making them a valuable hedge (Examples: Gold, alternative assets, municipal bonds)
(b) Generates cash flow
When times are uncertain, the market puts extra value on assets that are generating real cash flow (Examples: Stocks that pay dividends, or bonds that pay interest)
(c) Defensive or non-cyclical
During uncertain times, there are still companies with stocks that will thrive. They are usually bigger companies with conservative balance sheets and durable competitive advantages. (Examples: Quality stocks in healthcare, consumer staples, telecoms, REITs, and utilities sectors)
Lesson #5: Volatility reminds us that there is no reward without risk
Investing in stocks comes with risks, but it also comes with the best returns over time:
|Asset Type||Annualized real return, 1925-2014|
If stocks offer the best long run gains – and volatility is an unavoidable aspect of investing in stocks – then we must learn to accept volatility for what it is.
Even better, we must learn to build resilient portfolios that can weather any storm, while minimizing these effects.
30 Years of Gun Manufacturing in America
The U.S. has produced nearly 170 million firearms over the past three decades. Here are the numbers behind America’s gun manufacturing sector.
30 Years of Gun Manufacturing in America
While gun sales have been brisk in recent years, the uncertainty surrounding COVID-19 was a boon for the gun industry.
From 2010-2019, an average of 13 million guns were sold legally in the U.S. each year. In 2020 and 2021, annual gun sales sharply increased to 20 million.
While the U.S. does import millions of weapons each year, a large amount of firearms sold in the country were produced domestically. Let’s dig into the data behind the multi-billion dollar gun manufacturing industry in America.
Gun Manufacturing in the United States
According to a recent report from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. has produced nearly 170 million firearms over the past three decades, with production increasing sharply in recent years.
America’s gunmakers produce a wide variety of firearms, but they’re generally grouped into five categories; pistols, rifles, shotguns, revolvers, and everything else.
Below is a breakdown of firearms manufactured in the country over the past 30 years, by type:
|Year||Pistols||Rifles||Revolvers||Shotguns||Misc. Firearms||Total Firearms|
Pistols (36%) and rifles (35%) are the dominant categories, and over time, the former has become the most commonly produced firearm type.
In 2001, pistols accounted for 21% of firearms produced. Today, nearly half of all firearms produced are pistols.
Who is Producing America’s Firearms?
There are a wide variety of firearm manufacturing companies in the U.S., but production is dominated by a few key players.
Here are the top 10 gunmakers in America, which collectively make up 70% of production:
|Rank||Firearm Manufacturer||Guns Produced (2016-2020)||Share of total|
|1||Smith & Wesson Corp||8,218,199||17.2%|
|2||Sturm, Ruger & Company, Inc||8,166,448||17.1%|
|3||Sig Sauer Inc||3,660,629||7.7%|
|5||0 F Mossberg & Sons Inc||2,223,241||4.7%|
|6||Taurus International Manufacturing||1,996,121||4.2%|
|7||WM C Anderson Inc||1,816,625||3.8%|
|9||Henry RAC Holding Corp||1,378,544||2.9%|
|10||JIE Capital Holdings / Enterprises||1,258,969||2.6%|
One-third of production comes from two publicly-traded parent companies: Smith & Wesson (NYSE: RGR), and Sturm, Ruger & Co. (NASDAQ: SWBI)
Some of these players are especially dominant within certain types of firearms. For example:
- 58% of pistols were made by Smith & Wesson, Ruger, and SIG SAUER (2008–2018)
- 45% of rifles were made by Remington*, Ruger, and Smith & Wesson (2008–2018)
*In 2020, Remington filed for Chapter 11 bankruptcy protection, and its assets were divided and sold to various buyers. The Remington brand name is now owned by Vista Outdoor (NYSE: VSTO)
The Geography of Gun Manufacturing
Companies that manufacture guns hold a Type 07 license from the ATF. As of 2020, there are more than 16,000 Type 07 licensees across the United States.
Below is a state-level look at where the country’s licensees are located:
|State||Licenses (2000)||Licenses (2020)||Population||Licenses per 100,000 pop. (2020)|
These manufacturers are located all around the country, so these numbers are somewhat reflective of population. Unsurprisingly, large states like Texas and Florida have the most licensees.
Sorting by the number of licensees per 100,000 people offers a different point of view. By this measure, Wyoming, Montana, and Idaho come out on top.
If recent sales and production trends are any indication, these numbers may only continue to grow.
Made in America: Goods Exports by State
The U.S. exported $1.8 trillion worth of goods in 2021. This infographic looks at where that trade activity took place across the nation.
Made in America: Goods Exports by State
After China, the U.S. is the next largest exporter of goods in the world, shipping out $1.8 trillion worth of goods in 2021—an increase of 23% over the previous year.
Of course, that massive number doesn’t tell the whole story. The U.S. economy is multifaceted, with varying levels of trade activity taking place all across the nation.
Using the latest data on international trade from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, we’ve visualized the value of America’s goods exports by state.
Top 10 Exporter States
Here are the top 10 American states that exported the highest dollar value worth of goods during 2021. Combined, these export-leading states represent 59.4% of the nation’s total exports.
|Rank||State||Total Exports Value||% share|
|#3||New York||$84.9 billion||4.8%|
|#10||New Jersey||$49.5 billion||2.8%|
|Top 10 States||$1.04 trillion||59.4%|
Texas has been the top exporting state in the U.S. for an incredible 20 years in a row.
Last year, Texas exported $375 billion worth of goods, which is more than California ($175 billion), New York ($85 billion), and Louisiana ($77 billion) combined. The state’s largest manufacturing export category is petroleum and coal products, but it’s also important to mention that Texas led the nation in tech exports for the ninth straight year.
California was the second highest exporter of goods in 2021 with a total value of $175 billion, an increase of 12% from the previous year. The state’s main export by value was computer and electronic product manufacturing, representing 17.8% of the total U.S. exports of that industry. California was also second among all states in exports of machinery manufacturing, accounting for 13.9% of the U.S. total.
What Type of Goods are Exported?
Here is a breakdown of the biggest U.S. export categories by value in 2021.
|Rank||Product Group||Annual Export Value (2021)||Share of Total Exports|
|1||Mineral fuels including oil||$239.8 billion||13.7%|
|2||Machinery including computers||$209.3 billion||11.9%|
|3||Electrical machinery, equipment||$185.4 billion||10.6%|
|5||Optical, technical, medical apparatus||$91.7 billion||5.2%|
|6||Aircraft, spacecraft||$89.1 billion||5.1%|
|7||Gems, precious metals||$82.3 billion||4.7%|
|9||Plastics, plastic articles||$74.3 billion||4.2%|
|10||Organic chemicals||$42.9 billion||2.4%|
These top 10 export categories alone represent almost 70% of America’s total exports.
The biggest grower among this list is mineral fuels, up by 59% from last year. Pharmaceuticals saw the second biggest one-year increase (45%).
Top 10 U.S. Exports by Country of Destination
So who is buying “Made in America” products?
Unsurprisingly, neighboring countries Canada (17.5%) and Mexico (15.8%) are the two biggest buyers of American goods. Together, they purchase one-third of American exports.
|Rank||Destination Country||Share of U.S. Goods Exports|
|5||🇰🇷 South Korea||3.7%|
|7||🇬🇧 United Kingdom||3.5%|
Three Asian countries round out the top five list: China (8.6%), Japan (4.3%), and South Korea (3.7%). Together, the top five countries account for around half of all goods exports.
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