The stock market has a reputation for crashing and burning, but is it?
Is the market really this crashy and prone to catastrophic events?
In a new report from the University of Oxford, researchers looked at stock markets in the U.S. for the last 100 years, and found that the crash rate has been increasing over time, but has remained relatively stable at a low level of volatility.
“What is striking about this study is that it suggests that, even when volatility is high, stock markets remain relatively stable,” said Professor Brian Molloy, from the School of Economics and Public Policy at the University.
“In fact, the risk to the stability of the market is actually low, with volatility only slightly above the risk-free level.”
The researchers found that over the last century, the average crash rate per year was around 8 percent.
This has been fairly consistent, even over the past 40 years.
The authors say that while the risk of the stock crash has increased, the increase is mostly due to higher volatility, not the stock itself.
“In the stock markets, the volatility is not the result of bad news, it’s a result of the markets doing something fundamentally wrong,” Molloys co-author and researcher Dr. David Kravets said in a statement.
“So we would say that the overall risk to stability of markets is higher than the risk in the stock industry.”
The study was published in the journal Proceedings of the National Academy of Sciences.
It looked at data from more than 1,300 U.N. member states over the course of three decades.
The researchers used data from the United Nations World Food Program (WFP), the United States Food and Drug Administration (FDA), the U,S.
Census Bureau, the U., World Health Organization, the Organization for Economic Cooperation and Development (OECD), and the International Monetary Fund (IMF).
The study found that overall, crashes were most common in the 20s and 30s, but that the risk decreased as the decades went on.
In the early years, the crashes were relatively rare.
Today, they are common, and can occur anytime the stockmarket goes down, the study found.
“Our results suggest that the frequency of crashes has increased in recent decades, but the risk level has remained pretty stable,” Molls said.
In addition, the researchers say that when the risk increases, it tends to be smaller, but still a significant risk.
“The risk to stocks may decrease in the longer run, but there are still risks in terms of the volatility of stocks,” Mollaoy said.
“The downside risk is the volatility itself.
The downside risk increases in the long run as stocks become more volatile, but also increases when the stock is actually volatile.”
Molloy says it’s possible the risks that are most pronounced in the first years of the century are due to a lack of regulations.
“But, in general, we do not know how the regulations will work in the future,” Mollooy said in the statement.