US stocks are currently trading near record highs. However, history shows that the trading pattern so far in 2015 may not bode well for stock market returns going forward.
An article in The Wall Street Journal last week reported that analysis by Bespoke Investment Group showed that closing stock prices so far in 2015 were most similar to the closing prices in 1931. That year, the stock market posted its worst yearly return on record, falling 54 percent from 19 March.
Other similar years have not been so bad though. In fact, in computing the 10 years with the highest stock-market correlations to 2015, Bespoke found that the market rose from here on out in every year but 1931, averaging a gain of 8.1 percent. That is better than the average gain for all years since 1928 of 5.4 percent.
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