You Won’t Know It’s a Good or Bad Year In the Stock Market Until the Year is History

Everyone wants to know what the market is going to do this year.  They wanted to know what it was going to do last year, and they will want to know what it is going to do next year.  Most investors base the year’s fortunes on the current day, week or month.  I believe the market will not let us know if it is going to be a good year or a bad year until the year is history. 

 The S&P 500 has produced 68 “Up” years; however, 30% of the months of those up years produced negative returns.

even-more-confusing, Of the 24 "Down" years in the history of the S&P 500, 40% of the them produced positive returns.  In particular, the year 1976 produced an impressive return of 23.61%, but 7 of the year’s 12 months produced negative returns.   If that was 2018, good luck hanging in during the 24/7 news cycle!

Deciding what to do based on what is currently happening in the market might feel right, but history would suggest it is not a sound strategy!