Bernstein studied 119 years of history — including the Great Depression — and nailed down the 5 things every investor should learn about stock-market crashes

Quick gains and painful losses are part and parcel of the game and have been for over a century.

So what gives? The similar averages hide the fact that the distribution of volatility is more skewed today towards extremes, meaning there's both more low volatility and more high volatility.2. The economy does not drive extreme volatility. Proof for this lesson comes straight from two of the worst economic crises in modern history: the Great Depression and the Great Recession. Bernstein found that the highest volatility events in October 1929 and October 2018 were almost exactly the same — realized volatility shot up to within the 80th percentile rank of history in both eras.

However, there's an elephant in the room for the 1966-1994 era: Black Monday on October 19, 1987. But then, this market tragedy had little to do with the economy, and much to do with portfolio insurance and the forced selling that it triggered.For this lesson, Bernstein turns to one of the most violent stretches of the 20th century — from 1942-1965 — when the US waged World War 2, the Korean War, and the Vietnam War.

Ermmm every? RayDalio

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