The S&P 500 Index just finished its strongest first half since 2021... And before that, we haven't had a better start since 2003.
Stocks jumped 15.3% through the end of June. That's a rare feat – and better than a typical year for stocks.
But the good times are far from over...
You see, history shows that this kind of start means more gains are coming. And as I'll explain, we could see another double-digit rally by the end of the year.
When it comes to investing, you want to follow the trend. That's what works. The reason why is all about investor psychology...
When prices begin moving higher, folks want in on the gains. Higher prices bring in more and more buyers... And the flood of new buyers pushes prices even higher.
It's a virtuous cycle. When the uptrend is in place, it tends to stay that way. That's exactly what we've seen over the past two years. Take a look...
We're nearly two years into this bull market. Stocks are up more than 50% from the October 2022 low. And the first half of 2024 saw a big part of that rise.
Again, stocks rallied 15.3% in the first half of the year. Best of all, according to history, that's a strong sign of more gains to come.
To test it, I looked at every double-digit rise in stocks during the first half of the year. Since 1950, that has happened 18 times. Here's what came next...
Returns don't tend to slow down after a great start to the year. Instead, stocks have a history of rallying 6.8% through the end of the year. And 12 months later, the typical gain was an impressive 13.2%.
The results were even better in recent history. We've seen seven similar situations if we shorten our time frame to the past 30 years. Here's what happened after those setups...
The typical return was another 10.6% rise by the end of the year. And those gains swelled to 15% over the next 12 months.
Plus, stocks were higher by the end of the year 100% of the time... So the odds of success are stacked massively in our favor.
This shouldn't be surprising to DailyWealth readers. We often write about the power of investing with the trend. And today, the trend is in our favor.
History shows this momentum should continue. We could see double-digit gains by the end of 2024. And that means we want to stay bullish right now.
Good investing,
Brett Eversole
Further Reading
Investors are starting to take on risk once again. But don't let that worry you... It's a positive development for the bull run in moderation. We're still a long way from investor euphoria... Read more here.
Most of the major indexes are soaring. But that doesn't mean every stock is worth buying. A unique quirk of today's market shows just how crucial it is to be selective right now – so you can find the winners and avoid the losers... Learn more here.
