I am staying on the same theme as my last blog post, The First 48, because of what happened last week in the stock market: The S&P 500 gained at least 1% for four consecutive days. This is so rare that it has only occurred 5 times in history! The best news is that it is a great sign that stocks will be up a significant amount one year later.
Take a look at this table:
As you can see, the S&P 500 gained 6.9% last week. Looking at the most recent occurrence for comparison (2020), the index gained 7.4%. The subsequent return one year later was 33.8%. That’s a nice bounce. In fact, all of the one year returns after this event happened were greater than 20%. That’s a pretty good track record.
Of course, past performance does not indicate future returns, but this does put history on your side if you plan on staying in the market and/or adding to your current investments.
Let me know if you have any questions.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
