On Average intra-year SP500 had dropped 14.1%; May be at the beginning of a year buying a spread for 10% to 15% decline over years should make money!!!
I’ve seen this slide before and I don’t like it.
Not because it is wrong but because I believe it emphasizes the wrong data. While the average may be over 14%, it would appear that the median is less than 10% (just from eyeballing and not doing to math). Those years with 25%+ drops are pulling the average lower than the median.
This leads me to believe that an intra year decline of 10% is likely to continue lower - that there is probably some resistance around 9%. If I was going to trade based on such, I would certainly determine the median and ignore the average.
It is upto the individual to read the data as they like it! Which we all do anyways.
The main point was even on a bullish years, it is common to have 10% drawdown. Understanding this helps investor not to panic, and/ or when some of their favorite names are bit extended they can wait for the better entry points.
How you trade is up to you. For ex: I have routinely used the 10% drawdown to sell deep out of the money puts on indexes, (i.e., if SPY declines to 500, then I typically sell 400 strike) because of volatility you get better premium. Those are individual choices, based on their market view, risk tolerance, capital.