There’s much to unsettle us these days in economics, politics, society, and international affairs. North Korea is up there near the top of the list for many. Slow economic growth with sticky wage appreciation for others. Changing societal mores and values for others. But this morning’s Wall St Journal had some words that might be worth reading.
As I again and again point out: focus on the long term, not the next month. And for the long-term, retirement investor, 2017 has been surprisingly good. So far, at least.
What’s that mean for the rest of the year? Let alone for the next five or ten years? Don’t know, of course. But listen to what Ryan Detrick told the WSJ this morning:
The S&P 500 has climbed in each of the first six months of this year, a feat not accomplished for more than two decades, according to Ryan Detrick, a senior market strategist at LPL Financial. History is no guarantee, of course, but the last two times the S&P jumped every month in the first half of the year, in 1996 and 1995, the index went on to gain at least 12% in the last six months.
Seasonality also favors additional gains in the final six months of 2017. The S&P 500 ended the first half of the year with 8.2% price advance. Mr. Detrick notes that since 1950 the second half of the year has averaged an advance of 7.1% when the first six months see gains in excess of 8%. That’s well above the 4.5% average. More to the point, strong first half of the year has led to gains to close out the year 84% of all years when the S&P 500 has risen more than 8% from January through June.
“Strength usually begets strength, and we believe a large second-half pullback is unlikely,” Mr. Detrick says.