This post was originally published on TKer.co
The S&P 500 closed Friday at 3,839.50, down 19.4% for the year. This makes 2022 the worst year for the S&P since 2008 and the fourth-worst year since the index’s launch 1957.¹
(Source: Yahoo Finance)
While it may be the case that the stock market usually goes up, 2022 was a reminder it doesn’t always go up. This is just part of the deal when it comes to successful long-term investing. The road to stock market riches comes with lots of ups and downs.
According to data compiled by Carson Group’s Ryan Detrick, the S&P 500 has had a positive year 71% of the time. It’s an incredible track record, but it isn’t perfect.
(Source: Carson Group)
If history is a guide, then the odds favor positive returns in 2023. According to Detrick’s data, the S&P follows a negative year with a positive year 80% of the time with an average gain of 15%.
Again, the track record isn’t perfect. While it’s unusual for the S&P to see two consecutive years of negative returns, it’s not unprecedented. It happened after 1973 and 2000, and the subsequent year’s returns actually got worse.
(Source: Carson Group)
TKer’s best insights about the stock market 📈
10 truths about the stock market 📈The stock market can be an intimidating place: It’s real money on the line, there’s an overwhelming amount of information, and people have lost fortunes in it very quickly. But it’s also a place where thoughtful investors have long accumulated a lot of wealth. The primary difference between those two outlooks is related to misconceptions about the stock market that can lead people to make poor investment decisions.
Stomach-churning stock market sell-offs are normal🎢 Investors should always be mentally prepared for some big sell-offs in the stock market. It’s part of the deal when you invest in an asset class that is sensitive to the constant flow of good and bad news. Since 1950, the S&P 500 has seen an average annual max drawdown (i.e., the biggest intra-year sell-off) of 14%.
Wall Street’s 2023 outlook for stocks 🔭 I wouldn’t bet…
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