Do you sell after good years!

Every year now seems to throw up some global event that is capable of moving the markets (both up & down).  That won’t change and nor will our psychology to either sell to protect those past gains or sell to stop further losses.     After a good years performance –  Over the past 50 years (since 1976), when the MSCI World index has had an up year, the next year is also positive 73% of the time,with an average return of 8.5%.So goodusually follows good.  

After a down year, your odds get even better! The follow-on to a down year is positive 83% of the time, with an average return of nearly 12%.  Three years after a down year, the MSCI World has been in positive territory 92% of the time, and after five, that figure is 100%.

 

When the odds are in your favour, the data would suggest all you have to do is wait.

 

Source: 7IM/LSEG Workspace. Returns of MSCI World (excluding dividends). Past performance is not a guide to future returns