The stock market took a long pause between record highs. History says this is great news.

by Myles Udland, Yahoo Finance

The S&P 500 closed at a record high on Monday, its second straight record close after Friday saw the index break a two-year streak without a record high.

And stock market history suggests this break between records portends a better-than-average year ahead for the S&P 500.

In a note to clients on Monday, Keith Lerner, co-chief investment officer at Truist, noted that in 13 of the 14 prior instances, the index went at least a year between record highs the S&P 500 was higher 12 months later. The average gain over the ensuing 12 months? 14%, about 3 percentage points above the average annual return for the S&P 500.

Moreover, in nine of those 14 instances, the S&P 500 rose at least 10% over the next year. The widespread bullishness that overtook Wall Street strategists during 2023’s rally, then, appears to be on solid footing, historically speaking.

 

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