Skip to main content

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.

Story continues below advertisement

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨