After falling 19.4% in 2022, the S&P 500 Index rallied 6.2% in January 2023. Since 1945, there have been five other years where the S&P 500 gained more than 5% in January after trading down in the prior year. In those years (1954, 1961, 1967, 1975 and 2019), the S&P 500 rallied more than 10% from February through year end all five times. (Source: BESPOKE)

February 19th marked the 3-year anniversary of the stock market’s peak prior to the pandemic. Since that time the market has experienced two significant drawdowns. The first was the violent decline in March of 2020 where the market fell 34% in 33 days. The second was a slow grind lower throughout 2022 where the market was down 24% at one point this past October. While that sounds like a rough three years, the return over this period might surprise you. If someone had invested on that February 19th pre-pandemic peak, they would be +24% by now, which is ~8% per year.

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