If you’ve been paying attention to the markets, you know something truly incredible is happening. Stocks are on an absolute tear, with the S&P 500 posting its best first half performance since 2003! But don’t think for a second that this bull run is running out of steam. Oh no. In fact, I believe the biggest gains are still ahead of us.
Why am I so confident? Two reasons:
- The trend is our friend. Momentum in the markets tends to persist, drawing in more buyers and pushing prices ever higher. We’re riding a powerful wave of positive investor psychology right now.
- History is on our side. As my colleague Brett Eversole points out in his excellent article, “Stocks Could Jump Double Digits to End 2024”, a strong first half of the year has historically led to even bigger gains in the second half and beyond.
Brett ran the numbers and found that after similar strong starts, the S&P 500 rallied an additional 6.8% on average by year end. Even more impressive, stocks were up 100% of the time 12 months later, with an average gain of 15%!
As Brett explains:
“The results were even better in recent history. We’ve seen seven similar situations if we shorten our time frame to the past 30 years… The typical return was another 10.6% rise by the end of the year. And those gains swelled to 15% over the next 12 months.”
Brett Eversole
Friends, this is powerful stuff. The weight of evidence is clearly telling us to stay aggressively positioned in stocks. Fighting a trend this strong is a fool’s errand.
Of course, nothing in the markets is guaranteed. But given the strength of the current uptrend, I believe betting on further gains is the smart play. My advice:
- Stay fully invested. Now is not the time to be sitting on the sidelines. You want maximum exposure to capture the next leg higher.
- Let your winners run. Don’t be in a rush to take profits on your biggest gainers. Stocks in a strong uptrend can rise much further than most people expect.
- Buy the dips. Periodic pullbacks are inevitable, but they’re likely to be shallow and short-lived in this environment. Use them as opportunities to add to your positions.
The bottom line is this: All signs point to the bull market having plenty of room to run. Stick with it and I believe we could be looking at double-digit gains in the second half of the year, with even bigger profits over the next 12 months.
Let’s get out there and make some money!
To your wealth,
The Market Monitor
