In November 2022, the S&P 500 stock index was up over 5% in one trading day on the news that inflation could be “cooling.” This marked one of the best days for the stock market over the past 70+ years! In fact, there have only been 22 other times since 1953 where the S&P 500 was up over 5% in a single trading day.
We thought it helpful to look back at the subsequent 12 month returns after the stock market posted a positive 5%+ move in one day.
Source: Bespoke Research
Two Observations
1) These types of extreme one-day gains have historically been at or near the end of market downturns.
2) The average change over the next year has been +27.95% with
positive returns 20 out of 22 times.
As we have said many times, history never repeats itself but it often rhymes.
About the Author
Matt Price serves as a Partner and Director for The Price Group of Steward Partners. He resides in Houston with his wife, Emily, their three children and "Fisher" the family golden retriever. Matt studied at the University of Pennsylvania – Wharton School of Business for his Certified Investment Management Analyst (CIMA®) designation after receiving his undergraduate degree from the University of Tennessee - Knoxville. Over the past 11 years, Matt has helped families make high quality, common sense decisions regarding their wealth and their legacy. Matt firmly believes everyone needs a wealth coach!
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Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results.
The Standrd and Poor's 500 Index is widely regarded as the best single gauge of the U.S. equities market. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The Standrd and Poor's 500 Index focuses on the large-cap segment of the market; however, since it includes a significant portion of the total value of the market, it also represents the market.
The views expressed herein are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
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