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  Every Year Looks Volatile Compared To 2017
Posted Under: Broader Stock Market
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View from the Observation Deck

  1.  In 2017, the S&P 500 Index ("index") did not register a single down month on a total return basis, which includes reinvested dividends. That is not typically the case. 
    In 13 of the past 14 calendar years (2008-2021), which includes the 2008-2009 financial crisis, the index endured no less than two negative total return months and as many as eight (see table). 
  2. In 2022, the S&P 500 Index has endured four down months (January, February, April and June), according to S&P Dow Jones Indices.  
  3. In 2020, there were five down months and the -12.35% total return posted in March marked the largest monthly decline for any year in the table following 2008. Despite the five down months, the index posted a total return of 18.40%.
  4. From 2008 through June 2022, the S&P 500 Index endured a loss in 57 of the 174 months on a total return basis, or approximately 32.8% of the time. Over that same period, the index posted an average annualized total return of 8.95%, according to Bloomberg. 
  5. For comparative purposes, from 1926 through 2021, the S&P 500 Index posted a loss in 25 of the 96 calendar years on a total return basis, or approximately 26.0% of the time, according to data from Ibbotson Associates/Morningstar. Over that same period, the index posted an average annual total return of 10.46%.
  6. Stock prices don't rise in a straight line. Investors are going to encounter some turbulent times along the way. Remember, the S&P 500 Index has never failed to fully recoup any losses sustained from corrections or bear markets over time.
  7. A Bloomberg survey of 23 equity strategists found that their average 2022 year-end price target for the S&P 500 Index was 4,617 as of 6/15/22, down from 4,743 on 5/18/22 (23 strategists surveyed), according to its own release. The highest and lowest estimates were 5,330 (unchanged) and 3,900 (unchanged), respectively. The index closed trading on 7/6/22, at 3,845.08.
  8. Brian Wesbury, Chief Economist at First Trust Advisors L.P., announced on 5/9/22, that he is looking for a 2022 year-end price target of 4,900, down from his original forecast of 5,250 at the start of the year.  

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. There can be no assurance that any past trends will continue or that projections cited will occur. The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance.

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Posted on Thursday, July 7, 2022 @ 11:38 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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