RE:Rebound Potential? It would be interesting to weed out the high beta from the low beta from that list.
There have been only 8 times in history going back from 1926 where the stock market has had back to back loses. It is also interesting to note that the following 5 years after a losing year/s ( 1 to 4 consecutive year losses) produced annual returns of 12.8% to 17.9%
The best strategy is just to stay the course no matter how frustrating it can be. The following 5 years will make up for it. The chart below shows a 1 year return following 2,3 or 4 consecutive losing years as well as the drawdown.
| 2 Losing Years | Drawdown | Following Year’s Return |
| 1929-1930 | -33.32% | -43.34% |
| 1930-1931 | -68.24% | -8.19% |
| 1931-1932 | -51.53% | 53.99% |
| 1939-1940 | -10.19% | -11.59% |
| 1940-1941 | -21.37% | 20.34% |
| 1973-1974 | -41.13% | 37.20% |
| 2000-2001 | -20.99% | -22.10% |
| 2001-2002 | -33.99% | 28.68% |
| 3 Losing Years | Drawdown | Following Year’s Return |
| 1929-1931 | -76.66% | -8.19% |
| 1930-1932 | -76.43% | 53.99% |
| 1939-1941 | -21.78% | 20.34% |
| 2000-2002 | -43.09% | 28.68% |
| 4 Losing Years | Drawdown | Following Year’s Return |
| 1929-1932 | -84.85% | 53.99%
|