I did some historical analysis about years where the S&P 500 or a similar index suffered a loss, and what was the subsequent return the next year.
Since 1825, there have been 54 negative years, and of those years, 13 had negative returns the next year. Here are the years:
1827/1828
1853/1854
1882/1883/1884
1913/1914
1929/1930/1931/1932
1939/1940/1941
1973/1974
2000/2001/2002
The average loss for these subsequent down years is -16.6%. This happens less than 25% of the time. The average return the rest of the time is 20.1%. The overall average return for the larger index or its proxie following a down year is 11.3%.
Just breathe. Find the values where you can, and stick with solid strategies.
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