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With the first half of 2017 nearly complete, investors

really have gotten off easy in 2017. Inundated with

headlines about scandals involving officials at all levels

in Washington, stocks have seemingly done nothing

but go up as the S&P 500 has 24 all-time closing highs

since the year started. The worst sell-off the S&P 500

has seen from a closing basis this year was a 2.8% de-

cline over 32 trading days from March 1st through

April 13th. Maybe we’re getting old, but we can re-

member the days back in 2007 and 2008 when 2.8%

declines were common in a single day. At one point

over a 50-trading day period in 2008, the S&P 500 averaged an absolute daily change of 4.00%!

2017 has been so easy on the bulls, in fact, that the only other year in the S&P 500’s history that saw a

smaller maximum drawdown in the first half of the year was 1995. The table below lists the 17 years, in-

cluding this one, since 1928 where the S&P 500’s maximum drawdown from a closing high in the first half of

the year was 5% or less (sorted by smallest drawdown to largest, charts of each prior year are shown on

pages two and three). For each year, we have also included the S&P 500’s return during the first half of the

year as well as the maximum drawdown for the S&P 500 and its performance during the second half.

What really stands out in the results shown at right

is that in years where the S&P 500 saw steady gains

in the first half of the year with smaller than aver-

age pullbacks, the second half of the year also gen-

erally saw smaller than average drawdowns. Of

the 16 prior years shown, the S&P 500 averaged a

maximum drawdown of 6.3% in the second half,

which is well below the average 12.2% decline for

all years. Additionally, all but three years shown

saw smaller drawdowns than the median of 8.9%

for all years.

In terms of market performance in the second half

following a first half with below average draw-

downs, returns were also better than average. In

the sixteen years shown, the S&P 500 averaged a

gain of 7.8% in the 2nd half with positive returns

81.3% of the time. That’s twice the 3.9% average

second half return for the S&P 500 in all years and

also more consistent than the 66.3% frequency of

second half gains for all years. While there are al-

ways exceptions (2015), markets that start the

year steady have tended to finish steady as well.

Market Trading Like It’s 1995

S&P 500: 2017

2230

2260

2290

2320

2350

2380

2410

2440

2470

1/1/17 2/1/17 3/1/17 4/1/17 5/1/17 6/1/17

-2.8% over 32 trading days

Year Max Drawdown (%) % Change Max Drawdown (%) % Change

1995 -1.7 18.6 -2.5 13.1

2017 -2.8 9.2

1964 -3.1 8.9 -3.5 3.7

1954 -3.6 17.7 -4.4 23.2

1963 -3.6 9.9 -6.5 8.1

2015 -3.6 0.2 -12.2 -0.9

1985 -3.7 14.7 -7.7 10.1

1989 -4.2 14.5 -7.6 11.1

1961 -4.3 11.2 -3.9 10.7

1958 -4.4 13.1 -4.2 22.0

1959 -4.4 5.9 -9.2 2.4

1996 -4.6 8.9 -7.3 10.5

1983 -4.6 19.5 -6.6 -1.9

1976 -4.7 15.6 -8.4 3.0

1986 -4.9 18.7 -9.4 -3.5

1972 -4.9 4.9 -5.1 10.2

1993 -5.0 3.4 -2.6 3.5

Average 11.5 -6.3 7.8

Median 11.2 -6.5 9.1

% of Time Positive 81.3

All Years

Average -11.2 3.7 -12.2 3.9

Median -9.2 5.0 -8.9 4.8

% of Time Positive 64.4 66.3

S&P 500 Smallest First Half Drawdowns: 1928 - 2017

First Half Second Half

Better second half returns com-

pared to all years since 1928.

Page 2 of 3 B.I.G. Tips Report 6/21/17 BespokePremium.com

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S&P 500: 1993

425

430

435

440

445

450

455

460

465

470

475

1/4/93 3/4/93 5/4/93 7/4/93 9/4/93 11/4/93

S&P 500: 1972

100

104

108

112

116

120

1/3/72 3/3/72 5/3/72 7/3/72 9/3/72 11/3/72

S&P 500: 1986

200

210

220

230

240

250

260

1/2/86 3/2/86 5/2/86 7/2/86 9/2/86 11/2/86

S&P 500: 1976

90

95

100

105

110

1/2/76 3/2/76 5/2/76 7/2/76 9/2/76 11/2/76

S&P 500: 1983

135

145

155

165

175

1/3/83 3/3/83 5/3/83 7/3/83 9/3/83 11/3/83

S&P 500: 1996

575

600

625

650

675

700

725

750

775

1/2/96 3/2/96 5/2/96 7/2/96 9/2/96 11/2/96

S&P 500: 1959

52

56

60

1/2/59 3/2/59 5/2/59 7/2/59 9/2/59 11/2/59

S&P 500: 1958

40

44

48

52

56

1/2/58 3/2/58 5/2/58 7/2/58 9/2/58 11/2/58

Page 3 of 3 B.I.G. Tips Report 6/21/17 BespokePremium.com

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S&P 500: 1961

55

59

63

67

71

75

1/3/61 3/3/61 5/3/61 7/3/61 9/3/61 11/3/61

S&P 500: 1989

275

295

315

335

355

375

1/3/89 3/3/89 5/3/89 7/3/89 9/3/89 11/3/89

S&P 500: 1985

160

170

180

190

200

210

220

1/2/85 3/2/85 5/2/85 7/2/85 9/2/85 11/2/85

S&P 500: 2015

1850

1900

1950

2000

2050

2100

2150

1/2/15 3/2/15 5/2/15 7/2/15 9/2/15 11/2/15

S&P 500: 1963

62

64

66

68

70

72

74

76

1/2/63 3/2/63 5/2/63 7/2/63 9/2/63 11/2/63

S&P 500: 1954

24

27

30

33

36

1/4/54 3/4/54 5/4/54 7/4/54 9/4/54 11/4/54

S&P 500: 1964

75

78

81

84

87

1/2/64 3/2/64 5/2/64 7/2/64 9/2/64 11/2/64

S&P 500: 1995

450

475

500

525

550

575

600

625

1/3/95 3/3/95 5/3/95 7/3/95 9/3/95 11/3/95