History Says the Market Is About to Enter Its Most Bullish Week of the Year. Here’s How Much Investors Can Expect to Gain By 2025.

Meanwhile, if Santa doesn’t come, that could be a sign that the following year may turn into a lump of coal. Again, according to Carson Research, of the mere six times over the past 30 years that there wasn’t a Santa Claus rally and the final week of the year had negative returns, January was subsequently lower five times. Moreover, the following full year had negative returns four out of those six times.

That said, a Santa Claus rally is also no guarantee of an up year, either. While most years that follow a Santa Claus rally are positive, it’s also true that the stock market has positive returns roughly 70%-75% of the time. But there are exceptions. For instance, at the end of 2021, there was a Santa Claus rally, but the market went on to see a brutal 19.4% market decline in 2022.

While this knowledge may be helpful, seasonal trends shouldn’t necessarily influence your long-term investing plan. The stock market is inherently unpredictable, and as noted in the example above, there are always exceptions — potentially big ones. If one does attempt to time the market, investors should also take into account whether stocks are expensive or cheap, the state of the economy, and a host of other fundamental factors.

Moreover, over the long term, stock market investors tend to do well if they stick with a set strategy. While the S&P 500 is up 75% in all years since 1928, there can also be long stretches, as in the 1930s, 1970s, or 2000s, with negative or flat returns.

That said, the longer you stay in the market, the higher the probability of positive returns. If you invest in the S&P 500 and hold on for 10 years, the probability of a positive return rises to a whopping 94%. And if you stick with the S&P 500 for 20 years, those odds rise to 100%.

That’s right — based on history, S&P 500 investors have seen positive returns every time they held the index for 20 years or more, even when entering the market at the worst possible time. This is all the more reason to develop a process-driven, unemotional method of investing for the long term.

That said, if your process does dictate a contribution to your portfolio in the near future, you may want to do so before Christmas.

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

History Says the Market Is About to Enter Its Most Bullish Week of the Year. Here’s How Much Investors Can Expect to Gain By 2025. was originally published by The Motley Fool