The long-term trend of the US stock market is up. Since 1960, stocks have had a positive annual performance nearly 75% of the time. The average annual increase was 11%, with a standard deviation of 17%. By these numbers, the S&P 500 is up 23% year-to-date, making 2024 a good but not exceptional year yet. The highest return in a single year was 1995, with a 37% increase. 2008, during the Great Recession, was the S&P 500’s worst performing year, dropping 37%. In terms of deciles, annual returns are often in the 10-20% range. This happened 16 times. In second place, perhaps surprisingly, are returns in the 20-30% range. This has happened 13 times, including in 2023. What does this mean for 2025? Well, returns are not completely random and patterns emerge. Since 1960, there have been eight instances in which the stock market has risen for at least three consecutive years, including eight years in the 1980s, nine years in the 1990s, and an eight-year long rally from 2009 to 2017. It will be done. Therefore, historical trends seem to confirm that next year will be another positive year for the stock market. Of course, more important is the basics. Given the outlook for economic growth, lower interest rates, and positive corporate earnings growth next year, we believe there is more room in the current bull market, now in its second year.
