There is a 65.5% chance that U.S. stocks will be higher one year from today.
Many investors will be happy with those odds. That the stock market has been unexpectedly strong so far this year. However, they might not realize that the odds of an “up” market in 2018 would be the same even if stocks had performed badly this year.
Since the #Dow Jones Industrial Average was created in 1896, the stock market has risen 78 times. That is equivalent to 65.5% of the time. In addition, following calendar years in which the stock market rose, in the next calendar year it rose 65.4% of the time.
Optimists will latch on to the two-out-of-three odds of the market rising next year. However, pessimists will focus on the one-out-of-three odds of its falling. Regardless of what does happen, the outcome will actually have nothing to do with how well stocks have performed this year.