It's been a wonderful year to be a stock investor. Not only is 2013 shaping up to deliver the best returns of the past 10 years, it's also offered one of the smoothest rides.
The S&P 500 is up just more than 25% through Tuesday, putting it on pace to be the best single-year return since the 28.7% it climbed in 2003. What's made the returns even better, though, is the fact that they've come with the lowest volatility since before the financial crisis.
The Dow Jones industrial average, for example, has had only 24 days in which it finished up or down 1% or more, according to the December issue of the Independent Adviser for Vanguard Investors. That's the fewest such days since 2006. There also have been only four days that the blue-chip barometer finished up 2% or more; again, the most since 2006. The median number of days with 2% moves or more from 2007 to 2012 was 42.
The Chicago Board Options Exchange Market Volatility index, a measure of implied volatility, closed Tuesday at 14.55, down from its average of 21.32 since March 2009, when the stock market bottomed.
Investors have both lady luck and central bankers around the world to thank for this year's friction-less returns.