It’s been a rocky ride so far in October, but there is a silver lining. “Incredibly, the S&P 500 during a midterm year has never finished lower if you bought the October low and held till the end of the year,” explained LPL Senior Market Strategist Ryan Detrick.
Of course, no one can pick a market low with any consistency, but with October about to end, it is safe to assume the low happened last week or will happen over the next few days.
As our LPL Chart of the Day shows, the past 18 midterm years saw the S&P 500 Index gain from the October lowest close until the end of the year every single time—up 10.6% on average. Given the average year since 1950 is up 7.4% on average from the October lows, midterm years can see even more strength to end the year.
For more thoughts on the recent sell-off and what could happen the rest of 2018, be on the lookout for our latest Weekly Market Commentary.
IMPORTANT DISCLOSURES
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This research material has been prepared by LPL Financial LLC.
To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.
The investment products sold through LPL Financial are not insured deposits and are not FDIC/NCUA insured. These products are not bank/credit union obligations and are not endorsed, recommended or guaranteed by any bank/credit union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.