Good news for investors in 2012: The good news I have to share with you at the beginning of 2012 is that, statistically speaking, “wash years like 2011 are typically followed by big gains in the following year. The median market move following a year in which the S&P gains or loses less than 3% is a 12.3% gain, and the market is positive 78% of the time.” — Jason Goepfert of Sundial Capital Research.
In other words, 78 times out of 100 it is a good investment year that follows a year like we saw in 2011.
Investment summary of 2011: 2011 proved to be generally choppy, and often leaderless, in many asset classes. Out of the 252 trading days last year, 96 of those days saw the stock market move (either up or down) by 1% or more. In other words, 38% of the trading days resulted in moves of 1%, or greater, on the day. It was difficult to know what asset classes were in demand because they fluctuated so much. 2011 was also a “tale of two halves” and the first half of the year produced gains of 5%.
The second half of the year, however, was quite a different story. Since the end of June, the market was down more than 4%. No one knows what will happen in 2012, and that is no different on the investment front. However, I’ll keep you up to date and share topics on achieving financial success and peace of mind!