From a statistical point of view, one random day’s investment translates into increases in 56% of cases on Wall Street. As the time horizon extends, the odds of positive returns increase until they approach or even reach 100%.
With much of the major stock indices in historical record territory and some companies warning of a climate of euphoria, it may become “very difficult to say with certainty what part of the stock market cycle we are in,” he notes. thatMirabeau recruits.
The doubts that may arise in the current context force the Swiss company to look back for them Historical references. Wall Street started the year with five straight months of progress. “Since 1950, the S&P 500 has had 30 five-month winning streaks, including the most recent,” recalls Mirabaud, and “in all but two previous cases, the S&P 500 had It rose after 12 monthsWith an average profit of 12.5%.
Those coming from some sort of monthly bullish streak offer high potential for increases. However, as Mirabaud emphasizes, the key to increasing options profitability is to increase the investment time period. “The important thing is duration“, highlights in his latest report.
The historical series supports and even evaluates this thesis. The Swiss bank points out that “investors forget that stock market indices move Courses that tend to fall shortAnd “from these cycles we can extract Possibilities (which obviously does not guarantee future trends) with positive and negative returns.”
To do this, it uses Wall Street data collected by Dimensional Fund Advisors since 1926. statistics It gives just over 50% options to chase increases in investments in a single day. Specifically, the company notes that “it has 56% chance To get positive results In session“.
This percentage increases significantly, even 64%taking into account the reference period Month.
The options continue to increase as the time frame increases. Mirabeau states that, according to statistics, “it has a probability 75% To get positive results in year“.
The percentages rise to 88% for a period Two years90% to Three years91% to four years And 93% for five years.
The historical series raises this number to 100% in a long-term reference period. Decadewhen placed 97%.
A few extra doses of patience can “guarantee” investment success, at least statistically. Data collected over more than seven decades, since 1950, determines… 100% Options increments in periods, At least twelve yearsHence Mirabeau concludes that “the American stock market It has never fallen over periods of 12, 20 or 30 years“.
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