Time to read: 3 minutes |
Last year, global financial markets reacted sharply to the UK’s vote to leave the European Union. The decision for the country to begin negotiations for withdrawal, referred to as Brexit, prompted doubts about the future of the world’s second largest economy.
The aftermath of Brexit rocked investment markets as well and resulted in a 5% correction for the S&P 500. Since then, we’ve experienced the longest stretch without a 5% correction in over 20 years. How does this bode for the S&P 500 for the rest of 2017?
Don’t fight the trend.
Over time, the risk of an inevitable 5%+ market decline rises. Understanding this probability, we thought it might help to share yet another rarity about the historical performance of the S&P 500.
This year, the S&P 500 has closed higher every month since January. This pattern has only happened seven times since 1928, as noted in the chart below. Historically, the S&P 500 performance in the remaining six months of each of those years has tended to be positive with a median return of 8.44%.
As many of our clients and regular readers know, one of our key short-term investment rules is “Don’t fight the trend.” While there’s no guarantee that the S&P 500 performance will follow the pattern in the remainder of 2017, we remain in the bullish camp and will watch our models closely for deterioration of the positive trend before making any investment changes.
Stratos Private Wealth is a division through which Stratos Wealth Partners, Ltd. markets wealth management services. Investment advisory services offered through Stratos Wealth Partners, Ltd., a registered investment adviser. Stratos Wealth Partners and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only; and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Investing involves risk including possible loss of principal. Some of the information contained herein has been obtained from third party sources which are reasonably believed to be reliable, but we cannot guarantee its accuracy or completeness. The information should not be regarded as a complete analysis of the subjects discussed.