Rebounding from a Disaster Quarter

It hasn’t been a great quarter for the stock market. There have been more than 370 quarterly returns since 1926, and if the quarter were to end today, this would be the 14th worst for the S&P 500 index in that time frame.

This doesn't have to be a terrible omen for the future. Among those 13 previous quarters:

• After the S&P dropped 37 percent in the second quarter of 1932, it rose 345 percent over the next five years
• After the S&P dropped 22 percent in the fourth quarter of 2008, it rose 128 percent over the next five years 
• After the S&P dropped 18 percent in the third quarter of 1946, it rose 115 percent over the next five years

The average outlook for the next five years after those 13 disaster quarters: a rise of 91.3 percent. So maybe we'll be all right.