By Ryan Detrick
Incredibly, 2021 is halfway over! There’s a long way to go, but it has been a great year for stock bulls, a historically bad year for bonds, and a great year for the economy. We recently found these four charts that we think all investors need to see as we head into July.
As we turn the page on June, it is important to remember that the third quarter historically is the worst quarter of the year. The good news though is the weak performance opens the door to the historically very strong fourth quarter.
Now here’s the catch about the third quarter, July is usually strong. It is August and September you need to worry about. “July is historically a really good month for stocks during the usually dull summer months,” explained LPL Financial Chief Market Strategist Ryan Detrick. “In fact, during a post-election year, it is the best month of the year, up 2.2% on average since 1950.”
Apparently, stocks like July 4th, as the few days leading up to the holiday are some of the best of the year for the S&P 500 Index.
Lastly, a good start to a year is usually a good sign for the rest of the year. As shown in the LPL Chart of the day, when the first six months for the year gain more than 12.5% (like 2021 will likely do), then the final six months do extremely well, with a median return of 9.7%, nearly twice the median return of 5.0% for any given year.
Hope you enjoyed these four charts and here’s to a happy and safe July 4th holiday!
Ryan Detrick is chief market strategist for LPL Financial