Look, Don't Leap

Mark Twain once said that “History never repeats itself, but it does often rhyme.”

Well Leap Day this year has some interesting parallels to 2020.

We’re one week removed from a new high in the US stock market. Billie Eilish won Song of the Year at the Grammys. And the Kansas City Chiefs defeated the San Francisco 49ers in the Super Bowl.

Amazingly, these same events unfolded before leap day four years ago. [see footnote]

---

Hopefully, not everything from the past four years repeats.

I’d certainly prefer avoiding another pandemic, in particular.

But it’s worth noting how the stock market rewarded disciplined investors during a tumultuous period.

In addition to the pandemic, we continue to face a contentious political environment, the Ukraine-Russia and Israel-Hamas conflicts, as well as a cost of living crisis and rising government debt.

And yet, despite all these events, all portfolios rose over those 4 years, especially those concentrated in equities.

Even if the next stretch between leap days echoes the last one, investors could still have a positive outcome.

This will be especially important to remember if this Leap Year, which sees the largest number of global elections in history, should echo previous Leap Years. In particular investors who, at the start of the pandemic, questioned whether to liquidate their portfolios even at reduced values.

A Short Financial History Of Leap Years

• 2020 - Onset of the COVID-19 pandemic

• 2008 - Global Financial Crisis

• 2000 - The Dot.com bubble runs out of steam

• 1992 - Black Wednesday as the UK is forced to exit the European Exchange Rate Mechanism

• 1928 - The Roaring Twenties comes to an end as we enter The Great Depression

Footnote

2020

• The S&P 500 was at an all time high of 3380

• Billie Eilish’s Bad Guy won the 2020 Best Song at the Grammy’s

• Kansas City Chief’s beat the San Francisco 49ers to win their second Super Bowl, their first since 1970

2024

• The S&P 500 is at an all time high, breaking through the 5000 barrier for the first time

• Billie Eilish’s What Was I Made For? won the 2024 Best Song at the Grammy’s

• Kansas City Chief’s beat the San Francisco 49ers (again) to win their third Super Bowl in 4 years