A Century of Data Points to Positive 2023 Stock Market Returns

There have only been four multi-year stretches of negative stock market returns since 1928. Will 2023 be the fifth?

Justin Nugent

This article was last updated on 12/27/2022.

Will 2023 be a positive year for stocks? Most analysts are pretty pessimistic. The S&P has declined roughly 20% in 2022, and it’s once again cool to be a bear. Analysts and talking heads are abound with theories about how 2023 will be a difficult year full of double digit declines, due to issues like earnings declines and recession. However, historically speaking, back-to-back negative years for the stock market are extremely rare. 

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Will 2023 Be a Positive Year for Stocks?

Despite the headwinds and bad news, statistically, the stock market is likely to finish in the green in 2023. No one can know for certain — but since 1928 there have only been four instances of multi-year negative returns for the S&P 500.  

Those four instances: 1929-1932, 1939-1941, 1973-1974, 2000-2002.

will 2023 be a positive year for stocks, Back-to-Back Down Years For the Stock Market
Source: TradingView, Market Rebellion

Additionally, 2022 has been the 7th worst year for S&P 500 returns since 1928 — adding another layer of unusual into the mix.

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Biggest Yearly S&P 500 Drops

  1. 1931: -47.07%
  2. 1937: -38.59%
  3. 2008: -38.49%
  4. 1974: -29.72%
  5. 1930: -28.48%
  6. 2002: -23.37%
  7. 2022: -19.90% (at the time of writing)
will 2023 be a positive year for stocks, Back-to-Back Down Years For the Stock Market

Yearly Returns of the S&P 500. Source: MacroTrends

The Bottom Line: There are plenty of reasons to be bearish on the market. Inflation is high. Layoffs are abound. The Fed is still pressing forward with the fastest pace of rate increases in history. The Russia and Ukraine War continues to burn on, and several potential black swans remain — including tension between China and Taiwan. 2023 could absolutely finish in the red. But if it did, it would be only the fifth time in the past century.

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