Stock market performance has improved in recent weeks, but a lot of people are understandably still hunkering down. Are we at or near the point where investors should be thinking this is a great opportunity?
If you go back and look at the S&P 500 since the index was conceived, there’s only been six years when it’s lost 15 per cent of its value in the first six months of the year. The seventh was 2022. Not in a single one of those years has it actually lost money in the second half of the year.
I mention Wall Street because it leads all global markets. What UK investors may wish to note is that next year is the third year of the US presidential cycle, and it’s impossible to lose money in the third year of the US presidential cycle. Research from Yardeni Research, which is pretty similar to research I did in my first big Trading Secrets book, 15 years ago, looks back over the S&P 500 over the last 100 years, and if you look at the last 20 cycles to 1943, the average return is 16 per cent in the third year. The lowest return is -0.7 per cent. History is on our side for 2023 to be a far better year than 2022.