Stocks Analysis by Michael Gouvalaris covering: S&P 500. Read Michael Gouvalaris's latest article on Investing.com
Since 1928, there has only been 3 times that stocks have gained 25% or more in back to back years. Here is what happened the following year:So the last two instances saw stocks continue their gains the following year. But the one negative instance was quite bad! However the point is that stocks don’t have to go down just because they’ve had a solid run.
These are only estimates, but they remain a solid base line as long as the economy can avoid recession. During a recession, all bets are off. Based on current economic data, I place about a 30% chance of recession over the next 12 months. However the big difference here is interest rates. The last time the PE was this high, back in 2020, rates were only 1%. So even though the PE looked expensive, stocks remained attractively valued relative to fixed income alternatives.
In the above chart, I compiled the historical data since 1928, breaking down the 4 year presidential cycle and how stocks have behaved throughout. We can see that year 2 is clearly the weakest, and year 3 is strongest. But year 1 has also seen below average returns. Let’s drill down even deeper with more recent data. The above chart shows the average quarterly returns throughout the 4 year presidential cycle over the last 30 years. We can see Q1 of year 1 has been one of the weakest quarters on record, but things have tended to get better as the year progresses.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Edmunds hybrid sedan comparison: 2025 Honda Civic vs. 2025 Hyundai ElantraSimilar in size and fuel economy, these two hybrid compact sedans differ from there.
Read more »
Edmunds hybrid sedan comparison: 2025 Honda Civic vs. 2025 Hyundai ElantraSimilar in size and fuel economy, these two hybrid compact sedans differ from there.
Read more »
Edmunds hybrid sedan comparison: 2025 Honda Civic vs. 2025 Hyundai ElantraSimilar in size and fuel economy, these two hybrid compact sedans differ from there. The 2025 Honda Civic Hybrid boasts much stronger performance and a higher-quality cabin, while the 2025 Hyundai Elantra Hybrid provides more features for the money and better tech. There are advantages for both, but when the Civic is ahead, it’s ahead big time.
Read more »
Penn State 2025 Football Schedule: Penn State-Oregon Game Scheduled for 2025Penn State's 2025 football schedule got a sneak peek with the release of the Penn State vs. Oregon game, which also could be the White Out.
Read more »
BREAKING: Bruins' 2025 2025 Football Schedule RevealedThe Big Ten announced its football schedule for the 2025 season, and UCLA's schedule will feature a few familiar faces and multiple teams it did not play this past season in its first year in the Big Ten.
Read more »
Auburn football 2025 schedule reveal: Who do the Tigers play in 2025 and when?How Auburn football's schedule will look in 2025 following Wednesday's official reveal
Read more »