Wednesday, January 4, 2012

Comparing S&P 500 returns 2003-2005 vs. 2009-2011

The performance of the S&P 500 over the last three years has been remarkably similar to the performance of the index coming out of the last recession.  Comparing the performance of the S&P 500 from 2003-2005 to 2009-2011 shows that not only did both 3 year periods return approximately 40%, but the pace and timing of both rallies have been extremely close as well.

2003 and 2009 were both V shape recovery years in which the S&P bottomed around March and rallied heavily for the remainder of the year.  2004 and 2010 were both negative for most of the year up until the September/October time frame in which powerful late year rallies salvaged positive returns.  2005 and 2011 meanwhile were both years that the index basically ended flat--albeit with a little more volatility in 2011.

Will 2012 look like 2006?  If so, we're in for a nice year.

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