While the securities market is a long -term asset -generating machine, the S&P 500, the DOW Jones Industrial average and the Nasdaq Composite are free in the short term.
The wide S&P 500 is on the brink of history and it gives optimists a number of reasons to smile.
However, history is a pendulum that fluctuates in both directions, making short -term stock movements so difficult (and consistently) predicted.
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For more than a century, the stock market has been a stretching site for the creation of assets. Although real estate, bonds and goods have also helped investors grow their wealth, no other asset class is equivalent to the reconciliation of long -term annual returns.
However, the above statement is a warning: getting from point A to B will occasionally wear the heart of investors. Share market corrections, bears markets and even crashes are normal and inevitable aspects of the investment cycle, as we were witnesses this year from this year’s benchmark S&P 500(Snigex: ^GSPC)iconic Dow Jones Industry Average(Djindices: ^dji)and the oriented to growth Nasdaq Composite(Nasdaqindex: ^IIKSION);
Shortly after President Donald Trump April 2 Introduced his “liberation day” tariffs and trade policy, all three main stock indexes crossed their way through a mini -fake, which lasted only a week. The S&P 500 has survived its fifth stage two -day percentage in 75 years, while Nasdaq Composite has briefly immersed in the bear market.
Image Source: Getty Images.
However, all three indexes had gone to the race from April 8th. The closure bell, that is, when President Trump made a 90 -day pause about higher “mutual rates”. About 5.5 months Dow, S&P 500 and Nasdaq Composite accounted for 23%, 33%and 47%respectively, from the closure of the bell on September 24th.
When the Wall Street benchmark arrows a month after a month of profit, historically, it emphasizes that a stock representative is reduced in the future.
There is no proper metric or correlation event when extending this discussion, when it comes to anticipating directional movements in the S&P 500 or in separate stocks. If you were guaranteed to predict what stocks will work, you can be sure that all Wall Street will depend on such an indicator.
However, there are specific events and / or metrics with a particularly high correlation percentage in history. This is one of these events that should smile at the faces of bull market enthusiasts.
Since 1950 The Wall Street wide S&P 500 has registered 31 wins series for at least five consecutive months, the last of which took place since 2024. May 1 By 2024 September 30, although since 1950 On average since 1950, Since 1995 On average, a series of five or longer victories occurred every 1.58 years.
However, the increase in five months or longer victories series is not as impressive as the S&P 500 after these victories series.
Based on the post of Carson Group Chief Market Strategist Ryan Detrick X, S&P 500 Return is Endlessly blind Within 12 months after the end of the end of the victory at least five months.
Everything has been said that since 1950 31 individual five -months victory series were achieved. Although last year’s series still has to reach a 12-month mark (it will be September 30, 2025), the S&P 500 was higher after 12 months after 28 of the previous 30 events-93.3% success, with future stock movement. On average, the Wall Street index, which was at least five months of victory series, was on average.
If (From this writing on September 24) The S&P 500 is able to close in September over 6,460.26 in September, and it would mark the fifth consecutive consecutive month of profit and the 32th of the winning series in 75 years. Currently, the arrow is almost 178 points above its closing sign in August.
The prospect of lower interest rates that can encourage borrowing, employment, reunion and acquisition of companies, along with investors’ insatiable desire for everything related to artificial intelligence shows that Wall Street seems to have legs in the old bull market.
Image Source: Getty Images.
During the periods of multimedia, the stock market was constantly a bathing manufacturer. According to the Crestontm Research analysis, which investigated 106 separate 20 years of S&P dates from the early 20th century, there was no period of 20 years, including the value of the index, including the dividend.
However, the story is a pendulum that fluctuates in both directions, which means that no additional short -term upside down is not guaranteed.
As Detrick stressed that the winnings of the S&P 500 winning five months or more are prone to the fact that after a year’s return return, a separate assessment -based tool has a flawless experience that eventually predicted a significant negative “S&P 500”, “Dow Jones Industrial” average and Nasdaq composite.
The S&P 500 Shiller price and increase (P/E) ratio, which is also commonly called cyclically adjusted P/E ratio (CAPE ratio), is in a reddish area. The Shiller P/E average was almost 17.3 on average, as soon as it was checked until 1871. January
S&P 500 Shiller Cape Relationship Data provided by Ycharts.
On Monday, September 22, the S&P 500 Shiller P/E was over a few hundred of the 40 repeat, which is a figure that has only been achieved two times through the permanent bull market lasting 154 years. Shiller P/E in the first century in the first 2022 In the week of January, exceeded 40 and exceeded the highest place of all time-44,19 1999. December
After these two previous cases, the S&P 500 lost a quarter of its value in 2022. The bear market and was almost halved through the Dot-Com Bubble, which began in 2000. March
The historic precedent tells us that at any time, the S&P 500 Shiller P/E spends at least two months above 30 repeated out of 30, one or more of the basic volstryt stock indexes will lose at least 20% of its value, if not significantly more. The stock market, bordering its second to the most experienced value in the history of more than 150 years, is not expected that significant negative sides are expected to be expected in the long -distance future.
Although long-term thinking investors are continuing to be successful, the story of the bull-is not dirty-more than you can perceive in a short time.
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Since 1950 The S&P 500 will reach a 31 -time deed with accuracy of more than 93% for future stock movements, Motley Fool has originally announced.
