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It's Only The 6th Time In The Last 50 Years The S&P Has Recovered Like This

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It's Only The 6th Time In The Last 50 Years The S&P Has Recovered Like This

Between January 4 and February 11, the S&P 500 lost 10.31 percent. However, since February 12, the index recuperated 12 percent, closing around $204.79 on Thursday.

Jason Goepfert pointed out on his Twitter account that this will be the sixth time in 50 years that the S&P 500 has managed to erase a 10 percent year-to-date correction. The S&P is now up 0.45 percent year-to-date.

The chart below illustrates his point.

Source: Sundial Capital Research

The last time that the S&P 500 had seen such a rebound was in late 2011, when it managed to erase a loss of 11 percent. Interestingly, after all of such rebounds seen in the past 50 years, the S&P went on to gain at least 9.9 percent in the year that followed. Statistics also show it is unlikely that the S&P will surge on Friday, as the index rarely rose in the day following the recoup.

However, what investors can expect is the index to post gains over the next three-month period. In all five cases seen in the past 50 years, the S&P posted gains in the three-month period that followed the recuperation. In fact, three months after the recuperations seen in the chart above, the S&P had gained an average of 2.1 percent. A year after the rebound, the mean return ascends to 13.8 percent.

 

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