Financial Planning Fridays #47: What will stocks do in the 2nd half of 2023

One of our favorite hobbies at Presilium is looking at historical market data. After the market’s strong start in the first half of 2023, I wanted to look through history to see how the market had typically performed in the 2nd half of the year after similar first half returns.

We looked at the performance data for the S&P 500 from the first and 2nd half of every year since 1937.

The average first half of each year had a return of 5.28% while the second half had an average return of 6.16%. The average total return for each year since 1937 was a little bit more than 11.5%.

However, we found an interesting historical trend when we took a closer look at the data.

First, we divided the returns into 5 categories ranging from a loss of 10% plus, up to a gain of 20% plus for the first 6 months of the year. When the S&P 500 first half return is between 10%-20%, like we just experienced, the return for the 2nd half of the year has been positive 95% of the time!

Second, this chart uses the same categories but looks at the average return for the second half of each year. More good news—when the S&P 500 returns between 10 and 20% in the first half of the year—the average return in the second half of the year since 1937 is 10.8%. Once again, higher than any other category.
No one knows exactly how the second half of this year will look but once again we are very optimistic after studying history.

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.