So far, 2021 has been a very good year for equities: the S&P 500 gained around 15 percent in the first half of the year. Is that a record value? And can anything be deduced from history?
HQ Trust’s Sven Lehmann, Portfolio Manager, shared his analysiation of the performance of all first half-years since 1872 and divided them into six categories. Sven then evaluated how the performance of the market-wide US index turned out in the second six months in relation to the performance of the months from January to June.
- “With its gain of 15 per cent, the S&P 500 still manages to rank 26th since 1872 in the first half of 2021.”
- “However, in ten cases the US index gained more than 20 per cent in the first six months – for example, 62.6 per cent in 1933 or 41.8 per cent in 1975.”
- “A gain of between 10 and 20 per cent has historically been good for the second half of the year on average, with the S&P 500 gaining another 11.1 per cent.”
- “However, the dispersion of results was quite wide in the 37 cases in total, ranging from plus 30 to minus 20 per cent.”
- “Historically, the strongest gain was between July and December after a price slump at the beginning of the year. Then prices rose by an average of 33.1 per cent. Since 1872, however, there has only been a minus of more than 20 per cent three times, in 1877, 1932 and 1962.”
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