30% Up Years in the Stock Market

The S&P 500 is up 27% in 2024.

We’re quickly closing in on a 30% gain for the calendar year.

How rare is that feat?

It happens more often than you would think.

Here’s a look at every calendar year return on the S&P 500 going back to 1928:

The 30% gains are highlighted.

By my count, there were 18 years in which the stock market finished with a gain of 30% or more. So that’s roughly 20% of the time or one in every five years.

There were also 7 years in which the S&P 500 finished the year in the range of 25% to 30% gains. That means 25 out of the past 96 years have experienced gains of 25% or better.

That’s a lot of large gains. There are plenty of investors who are euphoric on the current environment but I know some people who are getting nervous.

Does this spell doom for the stock market?

Not necessarily. Here are the average returns for the S&P 500 in the year after an up year and gains of 20%+, 25%+ and 30% or more:

There isn’t a lot of signal in the noise here. The average return following a 30% gain on the stock market is, well, average.

It’s difficult to predict the future of the stock market based on short-term moves in either direction.

Here are the best years during this epic bull market run:

• 2009 +26%
• 2013 +32%
• 2017 +22%
• 2019 +31%
• 2020 +18%
• 2021 +28%
• 2023 +26%
• 2024 +27%

If the performance holds this year, that would be three out of the past four years with gains of 25% or more. It would also be 5 out of the past 6 years with double-digit gains. To be fair, 2022 was a double-digit down year so it hasn’t been all sunshine and rainbows.

This has been an incredible run for U.S. large cap stocks.

I don’t know when it will come to an end but I know it can’t last forever.

However, it is important to understand big up years in the stock market are nothing to be afraid of.

They happen more often than you think.

Further Reading:
3% Stock Market Returns For the Next Decade?