The S&P 500 came into October this year up double digits. It has done so on 42 occasions since 1926. That’s almost 50% of the time.
Of those 42 times, in 35 cases the market went up through the end of the year. That’s an 85% success rate, about as one-sided as market statistics can get.
On only 7 occasions did it fall in the fourth quarter.
BUT....
The 3 worst Q4 losses ever all occurred with the market up double digits - these worst Q4 drops ever were 1929, 1987 and last year
-28%, -23% and -14%
So most of the time when stocks are already up they continue to go up. but sometimes they also get crushed.
The average gain is 4.5% (even including the losses). this is also the 24th time the S&P has been up 20% or more through 3 quarters of the year.
We talked with famed Wall Street strategist Tony Dwyer about the tendency for markets that have a good three quarters to finish strong, and why this year looks like it should fall in line with the historical data.
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