On that incredible day, after Donald Trump declared war on the entire world with tariffs, the world stock markets went haywire. American stock markets in particular went into an incredibly violent fluctuation and of course fear mongers immediately emerged. They scared people into selling all their assets and preventing them from taking advantage of the tremendous opportunities that came their way. The usual rhetoric; America is sinking, America is ending, the dollar is ending, American bonds will never be useful again. The economic system as we know it is ending. China will win this trade war. If this trade war continues any longer, a hot war will break out. People were shaking in fear and sold out of their assets and, more importantly, they were unable to take advantage of the opportunities. However, I always believed at that time that this temporary noise would subside. It was clear that the tariffs announced by Donald Trump were impracticable. It was clear that concessions would be made and that they would be used in mutual bargaining. No matter how much China and America heckle each other, they both need each other. We will see together in the coming days that the tariff issue there will also be resolved.

By the way, people were right to be afraid. So there was no need to scare them extra. Because when we look at the movements of the S&P 500, I can say that there were hysterical movements. Here, the speed of the fall from 5800 to 4800 in the last month was unbelievable. Then, on April 10, it made one of the fastest daily increases in history. This is the third fastest single-day increase in history. The Dow Jones broke a record on the same day. It made its fastest increase in history. The Nasdaq broke a record on the same day. It made its second fastest increase in history in a single day. The stock markets fell again the next day. It went up again. Today, we are at the level of 5417. We are well behind the peak, but the stock market compensated for a significant portion of the losses. The movement was terrifying.

There is an index that we measure movement. It is called the volatility index or VIX. There are also those who call it the fear index. If it has risen too much, it means the market is in fear. If it is calm, it means the market is calm. This index, which was 17-18 on March 26, passed above 60 only 10 days later on April 4. It is already a very rare situation in history to pass above 60. But even more interestingly, it then fell back to 35. Then it rose above 55-56 again. Then it fell back again. Then it rose above 50 again. It seems to have calmed down a bit now. It fell back to 22.24. Again, this is a historical move.

So what do all these historical moves mean? Is the end of the world really coming and are American stock markets on the verge of a major collapse? We need to look at history from this perspective. Charlie Bilello did this on our behalf. He has a great Twitter account. I highly recommend you follow him. He also has an e-bulletin that he sends weekly, explaining everything that is happening in the markets with graphs. Charlie tweeted great things about what we are going through. Well, when we look at the S&P 500 after the extraordinary increases like on April 10, 1 year later, 3 years later, 5 years later, the stock markets are super positive. There is an important detail here. I am not saying it will be super tomorrow. The next 3-4 months may continue with high volatility. We may test the bottoms we tested on April 2, April 3, April 4 again. We have such data. But if you can extend your term a little, which I know is very difficult. Some people want everything to end in one day. The results are obvious, there are returns like 90% in 5 years, 28% in 3 years, 10% in 1 year. There are also extreme returns like 56 - 46 - 63 - 40% in one year. We do not know if this year will end positively, but history tells us that if there is such a tremendous single-day increase, it is a good day for the stock markets if you extend your term a little.

Another interesting data is that we came across one of the days when the S&P 500 fell the hardest in total for 4 days in a row. We experienced the twelfth such day on April 8, it fell by 12.1%. In 1987, it fell by 28.5% in 4 days. Again, God protected us, we did not fall that badly. However, after all the other 4-day series pullbacks, we see that the stock market has been going super up in the 1-year, 3-year and 5-year framework. So let's take a look at the performance of the S&P 500 since the beginning of the year, this analysis was made as of April 8. In other words, we are talking about 66 trading days. The S&P 500 fell 15.3% in 66 trading days. This is the fourth-hardest decline in history and the previous declines were in 1932 and 1939. As you know, 2020 is Covid. In other words, these places are incredibly extreme.

Remember, the period of World War 1939 was the only time it was this harsh. But most of them managed to close the year positively after such declines. They managed to close the year positively most of the time in total. Not always, but they managed to close positively most of the time. When we look at it this way, we may not be too afraid of this 4-day series decline. The stock market has experienced such things many times in the past and then it can continue to rise. Now let's look at Volatility, let's look at VIX. We experienced the fastest single-day rise in VIX on April 9th. There is no faster rise in history. It went from 33.62 to 52.33, a 35.8% increase in a single day. When we look at past examples, we have experienced one more. We experienced the third highest on August 6, 2024, last year. That is also a historic day. There was a 28.2% increase in VIX that day. After these types of sharp VIX increases, if we exclude 2007 and 2006, it also ends negative in the third and fourth years. Because as you know, there was a major financial crisis in 2008. If we leave these exceptions aside, stock markets have always continued to rise in the first, second, third, fourth and fifth years.

They collected the days when VIX was above 47 and the days when VIX was below 47 from 1990 to 2025 and looked at what stocks did in the year after VIX reached this level. The results are very interesting. For example, when we look at 1 year, the stock market increased by around 36% in the year after the periods when VIX broke records. In the years when VIX remained at normal levels, the stock market increased by around 12%. When we look at 2 years, this number is 56% after periods when VIX was super high, 25% after periods when VIX was normal, 58 - 39 when we look at 3 years, 91 - 56 when we look at 4 years, 133% - 74% when we look at 5 years. If VIX breaks a record, it is possible for the stock market to increase more in the next 1 - 2 - 3 - 4 and 5 years compared to periods when VIX was calmer. Of course, if you bought on those days when VIX peaked and the stock market bottomed, you benefit more from these.

What percentage of the 500 stocks in the S&P 500 index are above their 50-day moving average? As you know, the 50-day moving average is critical. In technical analysis, when stocks go below it, things are going a little crazy. In the first days of April 2025, only 6% of the 500 stocks in the S&P 500 index were able to stay above their 50-day moving average. In other words, we have reached historically bad levels here. It fell 10 times between 2001-2025, so it can be said that we experienced one of the worst days of 25 years. If you look after these bad days, if you buy from the oversold area, you earn more money than normal periods in 1 year, 2 years, 6 months, 9 months, 3 months, 4 months. In other words, volatility is actually our friend, even if we are afraid while living in it. If we act correctly, that is, if we do not sell our stocks in panic, if we can evaluate the dips and make small purchases from there.

So why is all this happening? Because the S&P 500 is actually always going up. Of course, there is no such thing as holding all the stocks during these declines. A sudden and big purchase is definitely not. Because as I mentioned, there is a more volatile period. The balance sheets will come in the coming days. Some stocks may make new lows there as well. Plus, we have Trump on our side, negotiations with China may get tougher. It is quite possible that another month will be volatile. After all, stock markets had a heart attack. We do not expect them to get up and run tomorrow. It may be a bit of a calm period, but if you really like a stock and if the price of that stock has fallen very sharply during these events, if you are sure that the company in question will do well, if you believe that the performance of that company will always be good in the long term, buying stocks on days when the VIX exceeds 50 almost always yields positive results starting from a one-year maturity. Because the S&P 500 is basically always going up.

On the other hand, there is always a reason to sell stocks. There are many different scare tools. Stock markets have fallen in many things such as earthquakes, oil spills, civil wars, Brexit. Remember, they fell super hard in Covid too. But if I'm not mistaken, the stock market had fallen to 2500-2600 in those days. Right now, the S&P 500 is close to 5500 and we don't like it. So why does the S&P 500 keep going up? Because there are good companies in it. These companies find new ways to grow no matter what the conditions are. For example, Nvidia immediately took steps to move some of its production to America because of the tariffs. They have plenty of cash. They have the ability to do these types of maneuvers. So if you are in quality companies, those quality companies manage to make comebacks. Nvidia's rise from last week's bottom alone is around 26%. So never panic.

Believe in the upward trend of stock markets. This does not mean; Always have all your money in papers or never put all your money in thinking that I will buy the first bottom you see. Always try to move in balance. What percentage of my money do I want to keep in the stock market right now? What percentage do I want to keep in cash? What are the risks? For example, I did not foresee that Trump's statement would be so harsh and that the stock market would experience historical declines in two days. But I was careful and reduced my portfolio quite a bit. Because technically the stock markets looked bad. Therefore, I entered this downward period with a lot of cash. Now I am enjoying that cash and continuing to buy.

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