The zigzag in the stock market last week may leave you wondering queasily: Will this quarter build on the blockbuster gains from the start of the year or wipe them away?
History suggests the winning streak will continue.
Over the past 30 years, strong quarters like the one that ended in March have tended to be followed by more gains. Smaller gains, usually, but gains nonetheless.
From 1982, the start of what some consider the modern era of investing, through the end of last year, there were 17 quarters in which the Standard & Poor's 500 index rose 10 percent or more.
Only twice were those gains followed by a losing quarter. In both cases, the loss was small: 1.1 percent and 0.1 percent. The other 15 times, the average gain in the subsequent quarter was 6.6 percent.
The two losses both came when the economy was just emerging from recession, periods that are ripe for market bumpiness as investors try to gauge whether the worst really is behind them.
This time around, the recession has been over for almost three years. And though the market has had quarterly swings, it has moved mostly higher. Investors are betting that a steady, if unimpressive, expansion is under way.
The S&P gained 12 percent from January through March, its best first quarter since 1998. That followed a gain of 11 percent in the quarter before, from October through December.
And the record is also promising when the market racks up two consecutive double-digit quarters. It's happened three other times since 1982. Each time was followed by a third quarterly gain averaging about 5 percent.
Think of it as Newton's first law of motion applied to stocks: Objects in motion tend to stay in motion unless acted on by an external force. When investors bid the market up, they keep doing so until something stops them.
The market had plenty to worry about last year _ a flare-up of the European debt crisis, fear of another recession in the United States and gridlock in Washington over tax cuts and the government's borrowing limit.
This month, Europe has returned as a concern. Borrowing costs have risen for Italy and Spain, two countries with flagging economies. The S&P is down 2.7 percent since the second quarter started two weeks ago _ its worst two weeks of the year.
But stocks are relatively cheap, which can be a good reason to buy. Stocks in the S&P 500 are trading at about 14.4 times earnings, according to research firm Birinyi Associates. Over the past decade, they've averaged 17.1.
Howard Silverblatt, senior index analyst at S&P, says a good first quarter usually augurs a good year.
The last time the S&P blew a double-digit first-quarter lead was 1930, between a stock market crash and the worst of the Depression. That year, the S&P rose 17 percent in the first three months but plunged 40 percent in the last nine.
Of course, Silverblatt adds, "Today is today, and history is history."
Today, the Federal Reserve is playing an outsized role in the market's movement. The Fed's third round of bond-buying ends in June, and investors are starting to worry. Bond-buying by the Fed the past three years has stimulated the economy by keeping long-term interest rates low and has made stocks more attractive than bonds to many investors.
The Fed announced Operation Twist, a plan to drive down interest rates even further, on Sept. 21. That triggered a 29 percent rally in the S&P from Oct. 3 through April 2.
Then, last Tuesday, the Fed released minutes of a meeting in March and disclosed that it is unlikely to stimulate the economy further. Many market strategists think the economy will need more help.
And there are still unknowns that could upend the market, including the Supreme Court's decision on President Barack Obama's health care law and hotly contested changes to tax policy.
Says Jack Ablin, chief investment officer of BMO-Harris Private Bank: "This is not a market you can put away and forget."
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