It's Been 6 Years Since the 2020 Market Crash. Here's How Much the S&P 500 Has Rallied Since Then

The S&P 500 hit a low of 2,191.86 on March 23, 2020 and closed at 6,581 six years later, effectively tripling (implying ~20% CAGR vs a long-run ~10%). The article argues that buying during the 2020 sell-off and staying invested—via quality stocks or index funds—produced above-average returns and emphasizes valuation and long-term patience. It also highlights Motley Fool Stock Advisor performance claims (total average return 913% vs 185% for the S&P 500) as support for active recommendations.

Analysis

Winners are concentrated among AI-infrastructure and high-conviction growth names while incumbent silicon and fee-sensitive exchange businesses face second-order pressure. NVDA benefits not just from direct GPU demand but from an asymmetric supply/demand dynamic: lead times and data-center power/cooling upgrades create a multi-quarter moat that can sustain pricing power and backlog conversion well beyond a single earnings beat. Conversely, Intel’s node delays and capital intensity make it a candidate for protracted market-share erosion — that gap catalyzes both elevated valuations for winners and slower capital returns for laggards.

Macro and sentiment are the primary regime risks on a 0–18 month horizon. A meaningful risk-off shock or rapid rate retracement that rotates capital out of growth could erase 30–50% of near-term excess returns in crowded AI longs; supply catch-up (TSMC/GPU fab ramp) could compress NVDA forward multiples over 6–12 months. For Netflix, content cadence, ad-monetization cadence, and FX flows create discrete 1–2 quarter catalysts that can re-rate shares; NDAQ’s P&L is more sensitive to vola and ETF/inflow volatility than to general equity returns.

The consensus — buy-the-theme broadly — underestimates the benefits of positioning trades that capture relative dispersion and volatility. Prefer spread structures and pair trades that monetize NVDA’s structural lead while hedging macro rotation and execution risk in legacy suppliers. Time trades around discrete catalysts (earnings, guidance, large conference selling windows) to improve skew and payoffs.

Key Decisions for Investors

• Long NVDA call-spread (buy 6–12 month ATM call, sell 15% OTM call) sized at 2–4% notional — target asymmetric 30–60% upside if AI capex continues; max loss = premium (risk-defined), breakeven within 3–6 months if backlog converts.
• Pair trade: long NVDA equity (or futures) / short INTC equity equal-dollar for 6–12 months — expect 30–50% relative outperformance if NVDA sustains channel premium and INTC continues to miss execution; stop-loss: 15% on pair notional or hedge dynamically with calls/puts.
• Buy NFLX into tactical pullbacks ahead of content/ads catalysts: accumulate shares or buy 6–9 month calls covered with 2–3 month OTM call sales to finance premium — scenario: 25–40% upside if subscriber/ARPU beats; downside cushioned by covered-call income.
• Trade NDAQ as a volatility/flow play: buy 3–6 month calls before major ETF rebalancings or sell a short-dated strangle around known low-vol windows to collect premium, keeping max exposure to 3–5% notional — reward: premium capture if flows are stable, risk: sharp vol spike on market sell-off.