The confusion and madness that unfolded during 2020 was like nothing we have seen before. In fact, the end of 2020 was a nail in the coffin for stock market pundits. Imagine you were an innocent bystander, just looking onto the chaos, trying to comprehend what it was that was going on - you would be shell-shocked.
You get recessions, you have stock markets declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets. - Peter Lynch
I have no doubt the bulls were smiling in 2020. And if history is any guide, the bulls will continue smiling into 2021. During the months of November and December of 2020, we saw a 14%+ gain to cap the year off. Each time the US stock market has returned 10%+ during the months of November and December has led to the US stock market finishing higher in the following year.
On the five previous occasions the index has climbed more than 10% in November and December since 1950 — 1954, 1962, 1970, 1985 and 1998 — the S&P 500 has gained an average of more than 18% the following year.
2021 has started the year off on the right foot. And if history is any guide, we could be in for another strong year.