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OPINION

FTSE 100 breaks records: so what!

FTSE 100 breaks records: so what!
January 19, 2017
FTSE 100 breaks records: so what!

Over the past 30 years we've found 25 occasions when the FTSE 100 has clocked up seven or more consecutive days of gains.

 

 

These wining streaks seem to have become a bit more frequent over time and perhaps it could be argued the performance following on from such runs has become a little less extreme.

However, the most striking thing about these 25 winning-streaks is that on average there seems to be very little difference between the returns from the index that followed over three months and a year than there was on any other day of the 30 years we've looked at. It seems the best thing to do after a big FTSE 100 winning streak may be to simply forget it ever happened.

We think the numbers speak for themselves:

Three-month performance
Any dayAfter seven-plus day run
Mean average performance1.5%1.5%
Median average performance2.3%2.3%
Standard deviation*7.86.1

One-year performance
Any dayAfter seven-plus day run
Mean average performance6.0%7.0%
Median average performance7.9%6.5%
Standard deviation*15.414.3

*The standard deviation is a measure of how closely results are clustered around the average with about 70 per cent of results found within one standard deviation of the average and 95 per cent found within two standard deviations.

Source: Thomson Datastream

 

Returns following seven-plus day winning streaks

Last day of winning streakDays in winning streakPerformance during winning streakThree-month FTSE 100 performance after streakOne-year FTSE 100 performance after streak
8/08/9672.9%2.6%32.0%
26/12/9611.8%5.1%22.5%
24/04/9782.4%10.8%33.6%
13/05/97116.9%6.7%27.3%
7/04/9986.4%1.9%1.5%
9/06/9983.6%-3.0%1.5%
11/11/9974.3%-5.5%-4.2%
8/11/0174.7%-2.8%-23.6%
21/03/03710.7%5.9%12.2%
5/01/04113.7%-0.7%6.5%
27/08/0472.9%5.8%16.4%
30/12/0471.9%1.7%16.6%
6/07/0572.7%2.7%12.6%
27/07/09119.1%13.4%17.0%
17/06/1073.3%4.8%8.8%
6/09/1075.5%6.1%-5.2%
5/07/1185.7%-15.3%-5.5%
15/05/13103.8%-3.1%2.2%
22/10/1394.1%2.0%-4.4%
24/02/1473.0%-0.7%1.2%
29/12/1484.8%3.9%-4.8%
26/01/1585.4%3.7%-13.7%
9/10/1585.8%-8.5%10.6%
15/08/1683.0%-2.1%na
13/01/17143.9%nana

Source: Thomson Datastream