Equity Market 2018: A Year of Turmoil and Market Volatility

2018 was a wild ride for the equity market. The year started off strong with a 5.5% gain in January, but it was short-lived as the market plummeted in February with a 12.1% decline.

The VIX, a measure of market volatility, surged to 37.3 in February, indicating high anxiety among investors. This was the highest level since 2011.

The market continued to be volatile throughout the year, with a 2.5% gain in March and a 3.6% decline in April. The S&P 500 index ended the year with a 4.4% gain, but it was a bumpy ride to get there.

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The stock market was hit hard in 2018, with the FTSE All-World index plummeting 12% this year, its worst performance since the global financial crisis.

This decline was felt worldwide, with markets in the United Kingdom and Europe also worried about Brexit's impact.

The Shanghai Composite entered a bear market in June and has now declined nearly 25% since the start of the year.

The Shenzhen Composite, which includes many of China's tech firms, dropped by more than 33% over the same period.

In Hong Kong, the Hang Seng is down 14%.

The market damage this year was most pronounced in China, where the world's second-largest economy is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels.

Hiring remains strong, but if it weakens in 2019, it would make investors more pessimistic and likely to sell stocks, potentially helping speed up an economic downturn.

The FTSE All-World index plummeted 12% this year, its worst performance since the global financial crisis, and a sharp reversal from a gain of nearly 25% in 2017.

December was a particularly dreadful month, with the S&P 500 down 9% and the Dow down 8.7%, the worst December since 1931.

The Dow fell by 350 points or more six times in a single seven-day stretch, and Christmas Eve was the worst ever for the index.

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The S&P 500 was up or down more than 1% nine times in December alone, compared to eight times in all of 2017.

The Dow has swung 1,000 points in a single session only eight times in its history, and five of those took place in 2018.

The VIX volatility index spiked, and CNN Business' Fear & Greed Index has been stuck in "Extreme Fear" throughout much of the year.

Fear of an economic slowdown, as well as a supply glut, spooked the oil market this year, with US crude closing down 24.9% at $45.41 a barrel.

The Dow Jones Industrial Average plummeted 551.80 points to 24,465.64, erasing its gain for 2018, and the S&P 500 plunged 1.8 percent to close at 2,641.89.

Stocks fell sharply last month amid heightened concerns about rising interest rates, slowing economic growth, and global trade tensions, with the S&P 500 falling 6.9 percent in October and the Dow losing 5.1 percent of its value.

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The global equity market had a generally negative year in 2018, with major indices turning down in the final quarter due to fears of trade disputes between the US and China.

The FTSE All-World index plummeted 12% this year, its worst performance since the global financial crisis.

Market volatility increased in the fourth quarter, with the S&P 500 index returning -11.5% and the MSCI All Country World Index returning -10.7%.

Declines of 10% have occurred numerous times in the past, but research shows that equity returns have been positive 74% of the time in US markets and 78% of the time in other developed markets over the subsequent 12 months.

The Shanghai Composite entered a bear market in June and has declined nearly 25% since the start of the year, while the Shenzhen Composite dropped by more than 33% over the same period.

In contrast, after declines of 10%, 20%, and 30%, markets have generally had positive returns, with US large cap stocks returning an average of 10.3% in the following 12 months.

The Hang Seng in Hong Kong is down 14% this year, while the S&P 500 index returned -11.5% in the fourth quarter of 2018.

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The US Market took a hit in 2018, with investors feeling the shockwaves from global events. The FTSE All-World index plummeted 12% this year, its worst performance since the global financial crisis.

This sharp reversal is a stark contrast to the gain of nearly 25% in 2017. The market damage this year was most pronounced in China, but its effects were felt worldwide.

In terms of specific numbers, the Shanghai Composite entered a bear market in June and has now declined nearly 25% since the start of the year. The Shenzhen Composite, which includes many of China's tech firms, dropped by more than 33% over the same period.

Despite this, the US market itself had a relatively stable year, with no major downturns to speak of.

Curious to learn more? Check out: SSE Composite Index

The stock market is often misunderstood as a reflection of the economy, but it's actually a forward-looking indicator, trying to predict what's to come.

Investors are always guessing what will happen next and how it might affect a company's profitability.

Better or worse economic indicators matter more to stock market investors than good or bad.

The pace of job growth declined in November, and the length of the average work week has shortened, hinting at potential future trouble.

Hiring remains strong, but a weakening of job growth in 2019 could make investors more pessimistic and lead to a sell-off.