Intraday drawdowns are some of the worst ever

Buy-the-dip is dead, but investors keep getting their chances.

This year has been the 2nd-worst buy-the-dip year since 1974. The S&P 500's average return following a down day in 2022 is one of the worst in history. It hasn't gotten much better lately, and the dips are getting deeper.

The S&P 500 has declined at least 2% intraday during more than two dozen days in the past 50 sessions. Tuesday was the latest example, continuing a cluster that started in April.

If this seems more painful than usual, that's because it is...

Going back to 1962, a cluster of 15 or more days with a 2% intraday loss is rare; it's happened only a dozen distinct times in 60 years. The clusters read like a who's who of major geopolitical and financial crises.

These spikes in 2% intraday losses lined up with some of the worst equity markets and most investor uncertainty. While not perfect, they also lined up with some of the best forward returns, with an average one-year gain of 21.5%.

Volatility like this is scary and painful. But as Baron Rothschild, an 18th-century British nobleman supposedly said, "The time to buy is when there's blood in the streets."