History shows that oil price shocks are often buying opportunities:
Over the past 40 years, the 12-month return of the S&P 500 after oil prices surged by 20% in 2 days is +24%.
In 6 out of 7 cases since 1986, the S&P 500 was higher 1 year after oil prices surged.
The strongest recovery reached +54% after the collapse due to the pandemic in 2020, driven by large-scale economic stimulus responses from central banks and governments.
The only negative result was a decrease of -11% during the financial crisis in 2008.
In other words, every oil shock in the past 40 years that did not lead to a prolonged recession has been followed by a strong recovery.
Oil price shocks usually occur in a short period and create long-term buying opportunities.
Over the past 40 years, the 12-month return of the S&P 500 after oil prices surged by 20% in 2 days is +24%.
In 6 out of 7 cases since 1986, the S&P 500 was higher 1 year after oil prices surged.
The strongest recovery reached +54% after the collapse due to the pandemic in 2020, driven by large-scale economic stimulus responses from central banks and governments.
The only negative result was a decrease of -11% during the financial crisis in 2008.
In other words, every oil shock in the past 40 years that did not lead to a prolonged recession has been followed by a strong recovery.
Oil price shocks usually occur in a short period and create long-term buying opportunities.
