“Everything in boxing is backwards.”

-Eddie Dupris, “Million Dollar Baby”

When markets are down, the natural bias is to sell. But looking at history, the more the S&P 500 is down, the better it does in the next year, on average. Like boxing for Eddie Dupris, everything in investing is backwards.

Below we look at how the S&P 500 has performed based on how far down we are from the highest point over the prior year. That’s the “drawdown.” These are averages and there’s a big range of individual outcomes around each one. But the averages do tell a story.

Current conditions matter, but history is always a good starting point for evaluating where things may go moving forward.

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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.

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