Kingsmill’s Investment Miscellanea

Jan 10, 2020 | Joshua Kingsmill


Welcome to 2020. I’m re-launching my weekly columns, as part of my 2020 financial resolutions. I always enjoyed putting my thoughts down, I got good feedback, and it’s a discipline that I’m looking forward to incorporating going forward (and this isn’t a “go to the gym three times in Jan then forget about it resolution!”)


People always ask at this time of the year: “what do you think will happen in the market this year”. I always preface my answer by going back to what has happened historically, using some of these Fun Facts:


In the last 91 years, the odds of the S&P 500 delivering positive total returns in any given calendar year is 3 out of 4 (73%). The odds of a double-digit advance in the S&P 500 are more than half the years (56%). More than a third of the time, the S&P gains more than 20% (35%).


The pessimist would point out that the odds a double-digit decline in the S&P 500 is about one in eight (12%) and the probability of annual losses greater than -20% is 1 in 12 (7%)


Only at the end of the year we can only look back to see how the year market fares, but the 6 worst-performing years – 1930 (-25%), 1931 (-44%), 1937 (-35%), 1974 (-26%), 2002 (-22%), 2008 (-37%) all coincided with U.S. recessions and-or asset bubble (e.g., the Mortgage-backed Housing Bubble, the Great Depression, the Dot-Com Bubble,).


You might be asking: “well that’s great, but what do you really think about this year?”


Here’s my take: “I see the market like the Toronto Raptors. Last year we were the champions, but I don’t think they will repeat this year, but still put in a good showing”


Normally I would make a prediction on a sporting or cultural event, but that’s for the next one.


Have a great weekend…