Investing.com — Because the bull market enters its third yr, the Sevens Report sees little cause for bearishness regardless of stretched valuations and geopolitical dangers.
Sevens stated in a word that “there are positives equivalent to stable financial progress, looming pro-growth insurance policies from Trump and the Republicans, (possible) extra charge cuts, and purportedly $7 trillion of money on the sidelines ready to be deployed.”
Historic information is alleged to help the optimism. Sevens Report highlights that “going again to 1950, there have been eight occasions the place the delivered back-to-back 20% returns (not counting 2023 and 2024). The next yr produced a median return of 12.3%, with constructive efficiency in six of these eight instances.”
The agency believes the sample suggests the potential for continued features, even after two sturdy years.
The report additionally references previous efficiency throughout related intervals: “Within the earlier three cases the place the S&P 500 went up by 25% in two straight years, the index was constructive the next yr two out of 3 times.”
These cases underscore the potential for additional market energy, even after important features.
Furthermore, Sevens Report factors out that investing at market highs has traditionally led to sturdy ahead returns, with the S&P 500 setting 57 all-time highs in 2024.
In addition they word, “The S&P 500 has recorded modest features of 5.5%, on common, throughout the 12 months following the preliminary minimize of a Fed rate-cutting cycle,” typically doubling within the absence of a recession.
Whereas acknowledging the improbability of one other 20%-25% acquire, the agency concludes that it “wouldn’t rule out one other first rate acquire in 2025,” suggesting that historic tendencies favor continued constructive market efficiency regardless of latest sturdy returns.
