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2017 was a pretty good year for the stock market. The 19th best since the Dow Jones Average was introduced in 1896.
This decade hasn’t been bad either. We haven’t had a down year. This has never happened in a full decade before. That being said, we shouldn’t fall in to the trap of believing in some sort of mythical mean reversion in 2018 or 2019. We may not have a down year this decade.
Nearly 70% of the time, the stock market has moved higher; and the average “up year” has been better (+20%) than the average “down year” has been bad (-15%). At least that’s the way the last 122 years have gone. If this history is a guide (yes, a big if) the likelihood that we finish out the decade with ten consecutive up years is about 50/50.
For what it is worth, the decade-to-date returns only rank fourth out of 12+ decades of the Dow. We’ll see what the next two years bring as we finish this one out, but – at least looking backward – it hasn’t been a terrible idea to be long the US stock market over the past four decades. It might not be terrible for the next four either.
FOOTNOTES
DISCLAIMER
The views and opinions expressed in this post are those of the post’s author and do not necessarily reflect the views of Albert Bridge Capital, or its affiliates. This post has been provided solely for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The author makes no representations as to the accuracy or completeness of any information in this post or found by following any link in this post.
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