A little nervous waiting for a year of continuous development
- AS «РV Invеstīсijаs»
In November, one of the most significant US stock indexes S&P 500 rose again – excluding a slight decline in March of this year, it has risen for a total of 13 consecutive months. Following the rise in stock prices triggered by the Tramp tax reform, we expect a whole year of continuous development in the stock markets.
The development of market for thirteen consecutive months or a little decrease in price not exceeding 0.1% last time was 1958-1959 and lasted for 15 months. Hence, approximately 60 years ago. In fact, it is enough to look back at the history to state that now something special is happening in the stock market. As a rule, long-term development ends with an unexpected and often significant correction of the market. At the same time, the current trend of long-term development, which began in 2009 with an index of S&P 676.5 and brought almost threefold growth, is neither the longest nor the most significant in the history of stock markets. Between 1987 and 2000, as a result of the almost thirteen-year trend of development, the S&P index rose by 5.8 times. Two-three-year “development races” in the stock market are not uncommon, there were such at least ten. It is clear why among market analysts there is no unity, whether the current development curve is reasonable or protracted. But nevertheless it is clear that nervousness is growing – every new month of development reminds of a possibility of bringing correction closer.