It's been a dizzying year for stock investors, as big swings in the Standard & Poor's 500 have become commonplace.

Share story

It’s been a dizzying year for stock investors, as big swings in the Standard & Poor’s 500 have become commonplace.

More than 40 percent of trading days this year, through Aug 5, featured swings of more than 1 percent.

The S&P 500 hasn’t experienced such a high rate of 1 percent or higher daily swings since 2002, and it’s on track to be the fourth-most volatile year since the Great Depression, according to data compiled by Crandall, Pierce & Co.

In July, the S&P 500 had four consecutive days of such swings. In January, they happened for an entire week. Surprisingly, nearly half of the 1 percent-plus days in 2008 have been upswings.

“I’ve watched the markets on a daily basis for 48 years,” says Don Hodges, co-manager of the Hodges Fund (HDPMX). “I have never seen the radical, precipitous moves in stocks that I see right now.”

He says hedge funds, which are run by professional investors who are notoriously quick to trade, are among the main culprits. He says recent moves by federal regulators to curb some forms of “short selling,” where investors essentially bet a stock will fall, may prevent some “pile-ons” and help smooth the ride.