The S&P 500 has risen for five months in a row – and history points to momentum

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Since October, stocks have climbed over the wall of worry and closed in the green every month, setting aside concerns about inflation, recession, corporate profits, Fed hike, Fed easing and the like pushed. Barring disaster, Friday’s settlement will extend this winning streak to five months.

During this short period, the S&P 500 is up 25%, leaving reasonable investors wondering if the market has gone too far too quickly.

History once again answers resoundingly for those who question the trend potential of the US stock market: strength begets strength.

Since 1950, there have been thirty five-month series in the S&P 500, including the most recent one, along with another series that ended last July. In all but two cases, the S&P 500 was higher twelve months later, with an average gain of 12.5% ​​and a win rate of 93%. This compares to an average return over one year of 9.0% with a profit percentage of 74%.

The bullish advantage diminishes over shorter time frames, but most importantly, it doesn’t disappear.

Looking ahead one month after a five-month streak, the average historical return is 1.0% with a 76% win rate – versus an average 0.7% gain and a 61% win rate over all one-period periods month in the past 74 years.

And as we wrote, the gains are increasingly widespread, with the rally reaching beyond anything even superficially related to artificial intelligence.

Investors may be surprised to learn that the financial sector is the best-performing large-cap sector over the past five months, up 28%.

Tech follows closely behind with a return of 27%, closely followed by…

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