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This chart tracks the value of the S&P 500 index (the red line) against the five-year rolling returns of the same index (the blue line). Just to be clear, a five-year rolling return would be the cumulative (not compounded) return from 1932-1936, 1933-1937, 1934-1938, and so on.

As you can see, any time the five-year rolling returns approach 175 per cent, the market falls back pretty steeply. Perhaps even more significantly, the time between reaching that 175 per cent level and falling back down seems fairly short.

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