Wednesday, February 1, 2012

S&P Performance After a Strong January

Yesterday, I wrote (tongue in cheek) that after January's hot start, the S&P is on pace to climb 66% for 2012.  With another big gain to start February, it's looking like that might not be too far off.  I'm still not a believer in 66%, but after looking at some historical data, I'm slightly more willing to believe that a double digit year might be in store.

Below are the instances of a greater than 4% return for January since 1957.

There has never been a negative year following such a strong January, and only in 1987 did the market return less than double digits.  The 21.5% average annual return is pretty spectacular.

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