The stock market closed out a strong year in 2024, with the S&P 500 Index posting a gain of over 20% for the second consecutive year. Historically, this trend has been positive, with the index averaging a 10.6% return the following year and being positive 81% of the time after such strong performances.
However, investors should temper their expectations in January. The S&P 500 has historically underperformed in the first month of the year after strong years, with an average gain of just over 1%. While some may hope for another consecutive 20%+ gain, this feat is rare and often followed by a correction.
The most recent instances of back-to-back 20% gains occurred in 1995-1996, with the S&P 500 posting strong returns in both years. However, these streaks were not sustained into subsequent years, as the index experienced significant corrections in each of the next three years following 1998’s 27% return.
Source: https://finance.yahoo.com/news/another-banner-p-500-134609054.html