DID THE MARKETS GAIN ENOUGH?

Many retail investors and professionals are hugely concerned about the future of the US markets. Vast majority of people out there are thinking that after such a strong year the indices need to consolidate a bit. If we take a closer look at the historical data, the picture is more promising.

The average annual return in the last 90 years has been 11,8%, this means the double digit gain is the typical not the exceptional. More than each second year S&P500 made double digit gain. This year the S&P500 is around 7% gain so there is still further an upside possibility.

In each five years the markets tend to do more than 25%. In a bell curve the data are more surprising. The chance is 68% hat the market return is in the range of 11,5% and 27,4%.

On the losing and risk side there are only 4% chance that the market falls more than 30%, so if you are managing your money properly this correction are not really lethal for our portfolio. That means in each 25 years come a really big sell off and crisis.

All in all in our point of view we don’t see any reason not being bullish in the US markets.

The BFM Assets Team.