Global stocks rebounded sharply from the coronavirus market crash in 2020, but the ride was rocky. Even in a rising market, volatility is a clear and present danger. With so many risks clouding the outlook, we believe that investors should focus on generating a smoother pattern of returns through the recovery from COVID-19.

When equity markets tumbled in early 2020, controlling volatility was a high priority for many investors. But as markets recovered through the last nine months of the year, volatility might have seemed less pressing.

In fact, volatility persisted through 2020, even as stocks recovered. The daily volatility of the MSCI ACWI Index was 28%—nearly three times higher than in 2019. The index rose or fell by at least 1% in 90 days during 2020—more than three times as frequently as in 2019.