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Wednesday, February 15, 2023
SPX 500: Some Key Stats That Will Amaze You!
*Trading in financial market carries risk and can result in loss of capital.
*This performance is only observed with historical backtests and not traded by the company.
The product and investment ideas do not consider the risk profile and financial position of the recipient and may not be suitable for everyone. Trading in financial markets and use of margin involves a significant risk of loss, which can exceed deposits. Please read the complete disclaimer carefully. In the benchmark’s almost 100-year history, such occasions have been clear outliers. Yet when they have occurred, drops in the second year have always been deeper, with an average decline of 24%. Nonetheless, not being in any of the dramatic situations like the last four occasions raises hope for the bulls.
1. In the last 94 years starting 1928, there have been only 26 negative years for the SPX 500.
2. Of which there have only been 13 years where SPX 500 has delivered double digit negative returns.
3. Two back-to-back negative years are rare. Since 1928, the S&P 500 has declined for two consecutive years only on four occasions - The Great Depression, World War II, the 1970s oil crisis and the dot-com bubble.
Data Source: Bloomberg
Date: 21/11/2022, 3:00 PM UAE Time
In the benchmark’s almost 100-year history, such occasions have been clear outliers. Yet when they have occurred, drops in the second year have always been deeper, with an average decline of 24%. Nonetheless, not being in any of the dramatic situations like the last four occasions raises hope for the bulls.
4. Besides, historical data dating back to 1950 shows that whenever the S&P 500 delivered negative returns in a year, it advanced an average of 15% in the following year and was higher 80% of the time. Moreover, if the fall was greater than 20% in a particular year (occurred only thrice since 1950), the index was higher the next year every single time with the average return being 27.1%.
SPX annual Performance based on the previous year performance (1950-2021)
Data Source: Bloomberg
Date: 21/11/2022, 3:00 PM UAE Time
Risks and Assumptions for Back-tested trading strategies
Data Source: Bloomberg
Arun Leslie John
Chief Market Analyst
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