Post on 25-Dec-2021
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With the first half of 2017 nearly complete, investors
really have gotten off easy in 2017. Inundated with
headlines about scandals involving officials at all levels
in Washington, stocks have seemingly done nothing
but go up as the S&P 500 has 24 all-time closing highs
since the year started. The worst sell-off the S&P 500
has seen from a closing basis this year was a 2.8% de-
cline over 32 trading days from March 1st through
April 13th. Maybe we’re getting old, but we can re-
member the days back in 2007 and 2008 when 2.8%
declines were common in a single day. At one point
over a 50-trading day period in 2008, the S&P 500 averaged an absolute daily change of 4.00%!
2017 has been so easy on the bulls, in fact, that the only other year in the S&P 500’s history that saw a
smaller maximum drawdown in the first half of the year was 1995. The table below lists the 17 years, in-
cluding this one, since 1928 where the S&P 500’s maximum drawdown from a closing high in the first half of
the year was 5% or less (sorted by smallest drawdown to largest, charts of each prior year are shown on
pages two and three). For each year, we have also included the S&P 500’s return during the first half of the
year as well as the maximum drawdown for the S&P 500 and its performance during the second half.
What really stands out in the results shown at right
is that in years where the S&P 500 saw steady gains
in the first half of the year with smaller than aver-
age pullbacks, the second half of the year also gen-
erally saw smaller than average drawdowns. Of
the 16 prior years shown, the S&P 500 averaged a
maximum drawdown of 6.3% in the second half,
which is well below the average 12.2% decline for
all years. Additionally, all but three years shown
saw smaller drawdowns than the median of 8.9%
for all years.
In terms of market performance in the second half
following a first half with below average draw-
downs, returns were also better than average. In
the sixteen years shown, the S&P 500 averaged a
gain of 7.8% in the 2nd half with positive returns
81.3% of the time. That’s twice the 3.9% average
second half return for the S&P 500 in all years and
also more consistent than the 66.3% frequency of
second half gains for all years. While there are al-
ways exceptions (2015), markets that start the
year steady have tended to finish steady as well.
Market Trading Like It’s 1995
S&P 500: 2017
2230
2260
2290
2320
2350
2380
2410
2440
2470
1/1/17 2/1/17 3/1/17 4/1/17 5/1/17 6/1/17
-2.8% over 32 trading days
Year Max Drawdown (%) % Change Max Drawdown (%) % Change
1995 -1.7 18.6 -2.5 13.1
2017 -2.8 9.2
1964 -3.1 8.9 -3.5 3.7
1954 -3.6 17.7 -4.4 23.2
1963 -3.6 9.9 -6.5 8.1
2015 -3.6 0.2 -12.2 -0.9
1985 -3.7 14.7 -7.7 10.1
1989 -4.2 14.5 -7.6 11.1
1961 -4.3 11.2 -3.9 10.7
1958 -4.4 13.1 -4.2 22.0
1959 -4.4 5.9 -9.2 2.4
1996 -4.6 8.9 -7.3 10.5
1983 -4.6 19.5 -6.6 -1.9
1976 -4.7 15.6 -8.4 3.0
1986 -4.9 18.7 -9.4 -3.5
1972 -4.9 4.9 -5.1 10.2
1993 -5.0 3.4 -2.6 3.5
Average 11.5 -6.3 7.8
Median 11.2 -6.5 9.1
% of Time Positive 81.3
All Years
Average -11.2 3.7 -12.2 3.9
Median -9.2 5.0 -8.9 4.8
% of Time Positive 64.4 66.3
S&P 500 Smallest First Half Drawdowns: 1928 - 2017
First Half Second Half
Better second half returns com-
pared to all years since 1928.
Page 2 of 3 B.I.G. Tips Report 6/21/17 BespokePremium.com
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S&P 500: 1993
425
430
435
440
445
450
455
460
465
470
475
1/4/93 3/4/93 5/4/93 7/4/93 9/4/93 11/4/93
S&P 500: 1972
100
104
108
112
116
120
1/3/72 3/3/72 5/3/72 7/3/72 9/3/72 11/3/72
S&P 500: 1986
200
210
220
230
240
250
260
1/2/86 3/2/86 5/2/86 7/2/86 9/2/86 11/2/86
S&P 500: 1976
90
95
100
105
110
1/2/76 3/2/76 5/2/76 7/2/76 9/2/76 11/2/76
S&P 500: 1983
135
145
155
165
175
1/3/83 3/3/83 5/3/83 7/3/83 9/3/83 11/3/83
S&P 500: 1996
575
600
625
650
675
700
725
750
775
1/2/96 3/2/96 5/2/96 7/2/96 9/2/96 11/2/96
S&P 500: 1959
52
56
60
1/2/59 3/2/59 5/2/59 7/2/59 9/2/59 11/2/59
S&P 500: 1958
40
44
48
52
56
1/2/58 3/2/58 5/2/58 7/2/58 9/2/58 11/2/58
Page 3 of 3 B.I.G. Tips Report 6/21/17 BespokePremium.com
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S&P 500: 1961
55
59
63
67
71
75
1/3/61 3/3/61 5/3/61 7/3/61 9/3/61 11/3/61
S&P 500: 1989
275
295
315
335
355
375
1/3/89 3/3/89 5/3/89 7/3/89 9/3/89 11/3/89
S&P 500: 1985
160
170
180
190
200
210
220
1/2/85 3/2/85 5/2/85 7/2/85 9/2/85 11/2/85
S&P 500: 2015
1850
1900
1950
2000
2050
2100
2150
1/2/15 3/2/15 5/2/15 7/2/15 9/2/15 11/2/15
S&P 500: 1963
62
64
66
68
70
72
74
76
1/2/63 3/2/63 5/2/63 7/2/63 9/2/63 11/2/63
S&P 500: 1954
24
27
30
33
36
1/4/54 3/4/54 5/4/54 7/4/54 9/4/54 11/4/54
S&P 500: 1964
75
78
81
84
87
1/2/64 3/2/64 5/2/64 7/2/64 9/2/64 11/2/64
S&P 500: 1995
450
475
500
525
550
575
600
625
1/3/95 3/3/95 5/3/95 7/3/95 9/3/95 11/3/95