Four Straight Double-Digit Years? What Happened the Last Three Times the Stock Market Did It

Short answer: The S&P 500 has now delivered three straight years of double-digit gains, and through late September 2026 it is on pace for a fourth. That has happened only three times since 1926: 1942–1945, 1949–1952 and 1995–1999. What came next was very different each time: a modest pullback in 1946, a flat 1953 followed by a 52% surge, and a three-year bear market after 1999. The clearest difference between the happy endings and the painful one was not the streak itself but how expensive stocks had become by the end of it. On that measure, today looks much more like the late 1990s than the post-war years. That is worth knowing, but it is not a signal to sell. Valuations stayed stretched for years before the dot-com peak.

How rare is a four-year double-digit streak?

Very rare. Using total returns, which include dividends, the S&P 500 gained 26.3% in 2023, 25.0% in 2024 and 17.9% in 2025. ^[1] That made 2023–2025 only the eighth time since 1926 that the index posted three double-digit years in a row. ^[2]

What happened in the fourth year after the previous seven streaks is close to a coin flip. The run continued three times (1945, 1952 and 1998), the market fell three times (1929, 1966 and 2022), and it was essentially flat once (2015). ^[2] Through September 24, 2026, the index was up about 13.5% for the year, so a fourth straight double-digit year is in reach but not yet in the books. ^[1]

What happened after the 1942–1945 run?

The first four-year streak came during World War II: gains of 20.3%, 25.9%, 19.8% and then 36.4% in 1945 as the war ended. ^[1] The next year, 1946, the market fell 8.1%, and 1947 added a modest 5.7%. ^[1] Not a crash, but a clear pause after a big run.

Valuations help explain the soft landing. At the start of 1946, the Shiller CAPE ratio, a price-to-earnings measure that averages ten years of inflation-adjusted earnings to smooth out booms and busts, stood at about 15.6. ^[3] That is below the long-run average of roughly 17. ^[4] Stocks had risen a lot, but they started the streak cheap and ended it roughly fairly priced.

What happened after the 1949–1952 run?

The post-war expansion produced the second streak: 18.8%, 31.7%, 24.0% and 18.4%. ^[1] The fifth year, 1953, slipped just 1.0%. Then 1954 delivered one of the best years in the index's history, up 52.6%, followed by another 31.6% in 1955. ^[1]

Here too the backdrop was cheap stocks. The CAPE was about 13.0 at the start of 1953, well below average. ^[3] Strong earnings growth in a booming economy meant prices could keep climbing without getting stretched.

What happened after the 1995–1999 run?

This is the streak everyone remembers, and it actually ran five years: 37.6%, 23.0%, 33.4%, 28.6% and 21.0%. ^[1] Then the dot-com bubble burst. The S&P 500 lost 9.1% in 2000, 11.9% in 2001 and 22.1% in 2002, three straight down years. ^[1] From peak to trough the index lost roughly 49% over about two and a half years. ^[4]

The valuation picture was the opposite of the 1940s and 1950s. The CAPE peaked at about 44.2 in late 1999, the highest reading on record, and still stood near 43.8 at the start of 2000. ^[3][4] Stocks had not just risen. They had become far more expensive relative to what companies actually earned.

What is the CAPE ratio telling us now?

At the start of the current streak in January 2023, the CAPE was about 28.3. By January 2026 it had climbed to about 39.7. ^[3] In September 2026 it was around 41, the second-highest level in the index's history, behind only the dot-com peak. ^[5] That is well over twice the long-run average of roughly 17. ^[4]

In plain terms, the current run has been powered partly by earnings growth and partly by investors paying more for each dollar of earnings. The two earlier streaks with happy endings started cheap and finished near or below average. The 1990s streak started around average and finished at a record high. By this measure, 2023–2026 rhymes with the 1990s.

Does a high CAPE mean a crash is coming?

No, and this is the part that matters most for your decisions. The CAPE is a poor timing tool. At the start of 1998 it was already about 32.9, and at the start of 1999 about 40.6, both higher than almost any reading in history. ^[3] Investors who sold on valuation alone would have missed gains of 28.6% in 1998 and 21.0% in 1999. ^[1] Expensive markets can get more expensive for a long time.

Where valuation has been more useful is in setting expectations for the long run. When the CAPE has been above 30, average returns over the following ten years have been meaningfully lower than the long-run norm, according to an analysis by TheStreet. ^[4] High starting prices tend to borrow from future returns rather than cancel them out overnight. And the damage when they do unwind can last: after the 2000 peak, the S&P 500's price did not stay above that level for good until 2013.

It is also worth being fair to today's market. Many of the companies driving the index are enormously profitable, which was not true of many dot-com darlings. ^[5] The risk is less about fantasy businesses and more about concentration. A handful of mega-cap technology stocks now make up roughly a third of the S&P 500, so an index fund is less diversified than its 500-stock label suggests. ^[6]

What else should investors watch?

Two things beyond the headline P/E. First, bond yields. When safer investments pay more, stocks face more competition for investors' money, and high valuations become harder to justify. In September 2026, the 10-year Treasury yield was hovering around 5%. ^[4] Second, how narrow the rally is. A streak carried by a few giant companies is more fragile than one where most stocks are rising together.

So what should you actually do with this?

History does not say the streak must end badly. Two of the three four-year runs were followed by, at worst, a mild dip and then more gains. It does say that the starting price matters, and that today's starting price is high. That argues for discipline, not panic.

A few practical steps hold up in any market. Rebalance if a strong run has pushed your stock allocation well above your target. Check how much of your portfolio actually rides on the same few companies, including through index funds. Make sure money you will need in the next few years is not sitting in stocks. And keep investing on a schedule rather than trying to call the top. If a downturn does come, it helps to know in advance how bull and bear markets usually play out, so you are less likely to sell at the worst moment.

Frequently asked questions

How many times has the S&P 500 had four straight double-digit years? Three times since 1926: 1942–1945, 1949–1952 and 1995–1999, the last of which ran to five years. If 2026 finishes up 10% or more, it will be the fourth.

What happened after those streaks? A decline of 8.1% in 1946, a 1.0% dip in 1953 followed by a 52.6% gain in 1954, and three straight losing years from 2000 through 2002.

What is a normal CAPE ratio? The long-run average is roughly 17. Around 41 in September 2026, today's reading is the second-highest on record, behind only the dot-com peak of about 44.

Should I sell because valuations are high? Valuation alone has been a poor signal for when to sell. The CAPE was already near 33 at the start of 1998, and stocks still gained 28.6% that year and 21.0% the next. It is more useful for setting realistic long-term expectations and for deciding whether your mix of stocks and safer assets still fits your goals.

This article is financial education, not financial advice. It does not recommend any specific investment, and past performance does not guarantee future results. Investing involves risk, including the possible loss of principal. Consider speaking with a qualified professional before making investment decisions.

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