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Market Update: 01-29-18

RECORDS, RISK, AND RETURNS

John Lynch Chief Investment Strategist, LPL Financial | Ryan Detrick, CMT Senior Market Strategist, LPL Financial

The equity market action over the past year is truly historic on many levels. It is important to recognize how unique this time frame has been and that a more volatile 2018 may be likely, and quite frankly normal. This week we will highlight some of the amazing streaks that have taken place, list a few of the reasons why we should anticipate a pickup in volatility, and explain how any possible weakness can provide suitable investors with an opportunity in diversified portfolios.

HOW RARE HAVE THINGS BEEN?

Below are five S&P 500 Index observations to illustrate just how unique the recent market activity has been: 1. The year 2017 was the first in history that the S&P 500 closed higher on a total return basis (including dividends) all 12 months of a calendar year. Should the S&P 500 close higher in January (up 7.2% as of January 26, 2018), this would be a record 15 consecutive months higher on a total return basis. The previous record (since 1950) was 11 consecutive months set twice during the 1950s, most recently in 1958–59.* 2. The index has officially gone 400 trading days without a 5% correction, which is the longest stretch in history. A week ago today the index broke the previous record of 394 trading days set during the mid-1990s...

Download the complete PDF with graphs here.

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