top of page

The S&P 500 is now in a bull market. What to expect now based on past data dating back to 1994?

Updated: Jul 9

The S&P 500 is now more than 20% higher than the October lows. This signifies the start of a bull market.

The start of this bull market represents the end of the longest bear run for the index since 1948. The bear market lasts for a total of 248 days.

Year to date, the S&P 500 is now around +13% higher. With just one more week to the end of June, it's likely that the S&P 500 will probably finish H1 with a double digit positive return.

I decided to look at the performance data of the index since 1994 (almost 30 years ago) just to satisfy my curiosity on how often the index returns a double digit positive return in H1 and what the corresponding H2 usually looks like.

Below is the data based on SPY.

Here are some facts/observations.

1) It's not uncommon for the index to return a double digit positive return in H1. In fact, this has happened 9 times since 1994. In the late 1990s, almost every H1 had a double digit positive return.

2) Out of the 20 instances where there is a positive return in H1, there are only 3 instances where H2 has a negative return. Out of the 9 instances where there is a double digit positive return, all experience a positive return in H2.

3) The index is green most of the time. Since 1994, there have only been 6 years where the index has had a negative annual return. Every time the index has a negative annual return, the next corresponding year almost always returns a positive annual return except for 2000 and 2001 when the doc com crash happens.

Beyond the data from these almost 30 years of history, there is also data indicating that the S&P 500 index rises 92% of the time in the 12 months following the start of a bull market. This is much higher than the historical 75% average over any 12 month period dating back to the 1950s.

Also, the S&P 500 averaged a 10% return over the next 6 months and 17.7% over the next 12 months after rallying 20% from market lows based on data from the 1950s onwards.

So what to expect now? Your call.

I remain cautiously optimistic and will continue to DCA.

I also do share additional content in my Telegram channel. 170 like-minded investors have already joined this channel. What are you waiting for?

365 views0 comments
bottom of page