What can investors expect from the S&P 500 in 2023?

If you had only invested in the S&P 500 at the start of 2022, you would have lost nearly a fifth of your portfolio.

To break even, the S&P 500 would need to rise 24% this year (assuming no portfolio changes).

History says 24% is tough, but 15% is more achievable. Why? Let’s take a look at this chart of the S&P 500’s returns by year (via Carson Group):

Some takeaways:

Back-to-back down years are rare. The previous incidents were during the 1973/1974 and 2000s dot-com crash — two (seriously) rough patches in history.

Positive years tend to follow negative years. After a negative year, the S&P 500 gained 15% on average — and finished positive 80% of the time.

Never say, “the S&P 500 can’t rise 24% in a single year,” – but also never say, “the S&P 500 won’t finish down two years in a row.”