Here is some excellent research by Sam Stovall over at CFRA Research. They asked the following question: If the broad stock market has a really strong first quarter, what typically happens for the remainder of the year? The results are really interesting!
Bottom line: the years that start really strong tend to finish even stronger!
Just look at the yellow columns below. It lists the year, the first quarter return, and then the full year return. Typically it is higher….not always, but most of the time it is. Sometimes even significantly higher!
This is what I have been saying for a few years now…..that we were entering a long and strong bull market. None of this surprises me. I expect it to get even more interesting in months and years to come. There will be sharp setbacks along the way, but our plan is to keep buying the dips.
Of course there is no promise of what lies ahead, and past performance is no guarantee of future results. One thing that is almost a sure thing however is that the dollar will keep eroding to inflation. Congress has no guard rails. They just passed another $1.2 trillion in spending over the weekend all but promising higher and higher deficits and debt. Cash and low interest savings will surely continue to erode their purchasing power. It’s best to try to keep your long-term money invested if you can, and in our view the broad stock market is an attractive way to do just that.
Mike
