With a day to go, this is one of the best first quarters for the S&P 500 Index ever. Of course, it comes on the heels of the worst fourth quarter since the financial crisis and the worst December since the Great Depression. Still, you have to be impressed with the overall bounce back after the big drop late last year.
“A big start to the year historically has suggested the bulls could remain in charge the rest of the year,” explained LPL Senior Market Strategist Ryan Detrick. “In fact, 9 of the past 10 times the S&P 500 was up at least 10% during the first quarter, the rest of the year was also in the green.”
As our LPL Chart of the Day shows, continued gains the final three quarters of the year were quite normal after a big first quarter. It is worth noting, however, that extreme gains might not be in the cards, as the average return for the final three quarters of the year is 5.8%, which is actually lower than the average year’s final three quarters of 6.3%.
For more on our thoughts on the current state of stocks, be sure to read why we readjusted our recommended domestic equity allocation in Balanced Risk Reward.