Investing

Total Returns in Years After 20%-Plus Gains

Interesting chart from SunTrust Private Wealth Management on stock performance in years after years following a year in which the market gained 20% or more. Twenty percent of the time the return has been negative historically while 80% of the time it has been positive. Those are decent odds but in reality they don’t mean much for 2020.

Given the market’s reaction or lack of reaction to some of the events of the past week or so, it seems like it’s going to take a major surprise to knock the market off its upward trajectory. While valuations are elevated, it has been paying to stay invested although diversification across geographies, asset classes and investment strategies is still a good idea.