Key Points

Our current stock market has been rising in value very briskly.
A pullback this year or next should not be surprising at all.
Do not keep money you will need soon in the stock market.

The analysts at Deutsche Bank Research recently highlighted an intriguing fact about our current stock market. The S&P 500 has climbed this quickly only four times in the 81 years since the end of World War II.

By the end of May the index had advanced more than 16 percent over the prior two months. For perspective the S&P 500 has delivered average annual returns near 10 percent excluding inflation across many decades and a strong 13.7 percent over the past ten years.

In three of those four prior episodes the U.S. economy was recovering from recession. Those periods followed the oil crisis of the 1970s the global financial crisis of 2008 and the recent Covid-19 shock.

The remaining case is the concerning one. It took place just before the stock market crash of 1987. That event was no ordinary correction. The Dow Jones Industrial Average dropped nearly 22 percent in a single day.

We do not appear to be emerging from a bear market. Consider the S&P 500 recent yearly returns.

Year	S&P 500 Return
2019	31.5%
2020	18.4%
2021	28.7%
2022	(18.11%)
2023	26.29%
2024	25.02%
2025	17.88%
2026	11.72% (year to date)

Source: Slickcharts.com as of June 2. Returns reflect reinvested dividends.

The pattern resembles 1987 more closely although every period differs in certain respects. The S&P 500 had risen about 39 percent in the year leading up to the 1987 crash.

It is not time to panic or exit stocks entirely because no one can predict daily or yearly market moves. Investors who sold after 2023 would have missed substantial gains.

Still a near-term pullback would not be unexpected. Move any funds needed within the next five or even ten years out of stocks to reduce risk.