History likely will not repeat itself, but it may rhyme.

Tune in as Chief Investment Officer at Blue Chip Partners, Daniel Dusina, CFA, and Managing Partner, Dan Seder, CFA, CMT, CFP® discuss the historical precedent for recent strength in the stock market, as well as why Dusina thinks bonds currently present a “once in a decade” investment opportunity. 

Data points to upward momentum in stocks continuing for another 12 months after 5 straight months of growth. 

In this clip from our recent podcast episode, Blue Chip Partners Chief Investment Officer Daniel Dusina, CFA shares what recent strength in the stock market could indicate for the path forward, as well as why Q1 2024 portrayed a healthier equity market than the same period last year.  

Should I move my money market funds to bonds? Data shows insights into why now may be the time.

It has not been uncommon historically for  bond yields to fall, bond prices to rise, and cash yields to drop after the final hike in a Federal Reserve cycle. This time, the opposite has happened.  

View The Written Quarterly Edge Report Here

In the first quarter, U.S. stocks as measured by the S&P 500 Index gained 10.55%. Seemingly picking up where 2023 left off, the U.S. market has returned ~26% over the previous 5 months – all of which displayed upward movement in the index. After a period of meaningful appreciation in the domestic equity market, it is common for investors to question the potential for further gains in the immediate term. While we are not in the business of predicting short-term price movements, we are encouraged by the healthy fundamentals across the corporate landscape. These include continued growth in both revenue and earnings as well as greater balance in the labor market. Further, performance of the U.S. equity market has been much more widespread in 2024 relative to 2023 (a component of our optimistic stance in the Q1 Quarterly Edge), which we would view as reflective of a healthy market. 

Finally, while we do not expect history to repeat itself, it certainly may rhyme with what is to come. Historical data indicates that 5 consecutive months of upward movement in the S&P 500 does not necessitate a pullback. In fact, future returns from the index have historically been higher than the long-term average after 5 consecutive months of positive performance, and have been more frequently positive over periods following a 5-month winning streak (full details found below). While we would not be surprised to experience periods of greater choppiness given lack thereof in recent months, both historical data and underlying fundamentals leave us optimistic on the trajectory of U.S. stocks.