Yesterday, we sent out a report to clients looking at how the S&P 500 has traded so far this year and compared it to the index’s pattern in prior years through 3/18. With the years that started off the most similarly to 2015, we then looked to see how the market traded for the remainder of those years. In the report we also looked at the performance of the S&P 500 during the third year of the Presidential Election Cycle and how those returns compared so far to this year. Finally, we also highlighted the peculiar trend of the S&P 500 to do well in years ending in the number five.
The matrix below summarizes the annual performance of the S&P 500 from 1928 through 2015 with each column representing a different decade. The right three columns summarize the performance of equities for years ending in 0,1,2,3,4,5,6,7,8,and 9. Historically speaking, decades typically do not start off on a positive note. For years ending in zero and one, the S&P 500 has seen negative average and median returns with gains less than half of the time. Years ending in the number seven haven’t exactly been lucky either. Since 1937, the S&P 500 has averaged a decline of 1% (median: +1.0%) in years ending with seven and positive returns just half of the time.
While years ending in zero, one, and seven haven’t been great for equities, you can’t get any luckier than years ending in five. Not including 2015 (which is also positive), the S&P 500 has averaged a gain of 25.3% (median: 20.4%) in the eight prior instances. Years ending in five have been the only ones with a perfect record, but years ending in three, eight, and nine have also been positive, averaging steady gains of more than ten percent with positive returns 78% of the time.
As mentioned above, these performance figures were part of a report we sent out to clients yesterday afternoon. If you are not currently a client and would like to see the report, we are offering free access to it for a limited time. Simply fill out a Bespoke contact form to request your copy, and we will send it out to you.