What Happens After the Stock Market is Up Big?
In a recent piece at Fortune I looked at the history of stock market moves after such a huge gain.There are always good reasons to talk yourself out of investing in the stock market. It’s possible the market will take a breather at some point because the gains have been so strong coming off the bottom last March.
But predicting the future path of the stock market based on what it has done over the past year is much harder than it sounds. Most of the time the stock market goes up but sometimes it goes down is about as good as it gets in terms of setting expectations for your portfolio.
It’s also true that the longer your time horizon, the better your odds are at seeing gains in the market.