August isn’t living up to stock investors’ expectations, and that’s no shocker.
Historically, August has ranked as the second-worst month for the S&P 500 in the last 35 years. September has also brought its own bumps along the way.
After a rollercoaster year in 2022, some investors have chosen to cash out a bit to safeguard their gains.
But take heart! Our call of the day comes from Seth Golden, Chief Market Strategist at Finom Group. He reassures us that the end of the S&P 500’s five-month winning streak isn’t all doom and gloom.
Why trust Golden’s insights? In February, he predicted the S&P 500 would hit 4,350 this year, a mark it achieved in June. Brushing aside recession concerns, he encouraged investors to seize opportunities in large growth stocks. His picks, Amazon (AMZN) and Visa (V), have yielded results this year.
Digging into the present, Golden references data from Carson Investment Research’s Ryan Detrick. Detrick studied five-month winning streaks for the S&P 500 since 1950, revealing that 79% of the time, these runs extended to six months. Although not the case now, Golden draws positivity from the data—after five months of gains, the S&P 500’s average performance was up 82% and 93% of the time in the six- and twelve-month periods that followed, respectively.
“The average S&P 500 returns 6 and 12 months later are also 6%+ and 12%+. Savvy market participants may find solace in the evolving price action,” the strategist shared.
Further reasons to hold steady? Golden highlights that the bull market was confirmed on 6/8/23, with the S&P 500 surging 20% from its bear market low. It took 165 days to achieve this shift—the second-longest bear-to-bull transition since 1952.
“All but one of these previous bear-to-bull markets outlasted and outperformed the current 9-month cycle. It’s unlikely that a new bear market starts at the 9-month mark without delivering further gains in the 12-month forward period,” Golden reasoned.
