Who We Are
Our Founding Principles
What We Do
Our Financial Planning Process
Our Comprehensive Services
Our Investment Process
Covenant Wealth Portal Login
CWS Vault Checklist
Covenant Wealth Portal Demo Video
Account View Login
Covenant Wealth Strategies Blog
Stone Barn Times
New Client Kit
Generational Prosperity Plan
Reasons For Optimism In The Second Half Of 2022
While market optimists are scarce these days, there are several historical patterns that provide reasons for optimism as the second half of 2022 gets underway.
“We fully understand the bear case right now and acknowledge optimists are scarce,” noted LPL Financial Equity Strategist Jeffrey Buchbinder. “Based on the market’s track record after sharp downdrafts and favorable seasonal forces in July, we think now may be a good time for those with some dry powder to nibble at this market.”
First, as shown in the chart below, stocks have historically bounced back strongly from big 2-quarter drops as we just experienced. In fact, after a more than 20% drop over 2 quarters (the S&P 500 Index fell 20.6% in the first half of 2022), the average gain the next 2 quarters has been 21.5%.
The average performance over the following year has been 31.4%, which is consistent with the average gain off of a midterm election year low (32%).
While of course we can’t predict that historical pattern will repeat, it certainly helps to understand what stocks have done before.
Another reason to be encouraged that stocks may soon be poised for a rebound is that in recent years July has tended to be a good month for stocks. Over the past decade, the S&P 500 Index has risen an average of 2.5% during July, marginally behind only April and November for the top months over that time period.
The start of a much-anticipated third quarter earnings season, along with the next round of inflation data combined with what we hear from the Fed at the end of this month will go a long way toward determining whether July follows this pattern of stock market gains. Don’t forget, shallow bear markets like we have so far tend to bottom at about 7 months on average. Month seven is July. History seems to be on the bulls’ side.
If you have specific questions related to your own investments or financial planning needs, we welcome you to
to set-up time to discuss how we can assist you.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. For more information on the risks associated with the strategies and product types discussed please visit
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.