“Don’t look for it, Taylor. You may not like what you find.” -Dr. Zaius to Taylor (Charleton Heston) at end of Planet of the Apes
Many bears are back at it, claiming that because stocks are looking at back-to-back 20% gains then 2025 must be doomed. Unfortunately, all we have to do is look at the data to see they once again could be on the wrong end of this amazing bull market.
Just as Dr. Zaius tried to warn Taylor in The Planet of the Apes that he may not like what he finds, the bears might be disappointed to find that strong returns after back-to-back 20% years is perfectly normal.
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Using total returns (since 1950) we found eight other times stocks gained 20% two years in a row and the next year was higher six times and up a solid 12.3% on average. Now what really stood out to me about the data below is the mid- to late-1990s saw an incredible record five years in a row of 20% or more gains. We didn’t have social media back then, but I could only imagine how mad that would have made the bears.
2024 of course isn’t over yet, but it is pretty incredible that as strong as last year was, this year is up more right now. For more of our overall views, as we laid out in Why We Aren’t Permabulls, we think continued gains in 2025 are likely, as the overall economy remains pretty solid, which we discussed in The Economic Outlook Looks Pretty Good – Part 1 and Part 2.
The bottom line is up 20% two years in a row actually suggests the potential for better than average returns in 2025, something we are on record is expecting next year. I will keep this one fairly quick, as this week we are putting the final touches on our Outlook 2025, which we will release in January.
We wish everyone out there a happy Thanksgiving. Enjoy some downtime with family and friends! Thanks for reading.
For more content by Ryan Detrick, Chief Market Strategist click here.
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