2024 has been a remarkable year. With the S&P 500 up nearly 30%, it has delivered the 5th most all-time highs since 1950 and back-to-back 20%+ gains for the first time since the 1990s. This exceptional performance warrants both celebration and caution. While 2025 may not mirror this level of success, the data doesn’t suggest a high likelihood of significant underperformance either.
A Year of New Highs:
How 2024 Stacks Up In Market History
Historically, years following 50 or more all-time highs have been mixed. The S&P 500 was positive just 43% of the time, with a median return of -0.7%. While this isn’t a reason to abandon equities, it does serve as a reminder of the strength we have seen this year.
All-Time Highs Vs. Other Days
Historical data since 1950 shows that there is virtually no difference in returns whether you invest on a day when the S&P 500 hits an all-time high or on any other day. Returns from one month to 12 months out are almost identical, as is the percentage of time the market is positive.
In addition, investing on any of the 1,427 all-time high days since 1950 led to a 20% or greater loss after 12 months only 18 times—just over 1% of the time. Compare that to investing on non-all-time high days, which resulted in a 20% loss 4% of the time. While the differences are small, investing at all-time highs carries slightly less risk of a major loss.
2024 – Another Year to Remember
The S&P 500 is currently up almost 30% year-to-date. This is remarkable as 2023 saw a 26% return, marking the first back-to-back 20%+ years since 1998-1999—a rare event in recent market history.
Naturally, some investors might feel cautious about 2025, assuming the market is “due” for a correction. But history tells a different story. Since 1928, the average return following two consecutive 20%+ years is 7.0%, slightly below the historical average of 11.1% but still solid. As for risk? You would have to go back to 1937 to find a year which saw a double-digit loss the following year.
The Market’s Reaction to Political Change: Democrat to Republican Transitions
Since 1928, there have been five instances where the presidency switched from a Democrat to a Republican. Historically, these transitions have brought strong market performance in the short term. Median returns tend to peak at an impressive 6.1% in the 60 days following an election –2024 has performed right on cue.