Five years of persistently slow growth and a sluggish labor market, increasing global instability and a new Fed Chair that openly contradicts herself — U.S. stocks seem to be able to shrug off any sort of news as long as there’s Fed stimulus to be had. Investors who have anticipated a correction in this “teflon market,” where bad news doesn’t stick, have been thwarted short squeeze by short squeeze. The latest argument for a market decline has been that we are overdue for a correction (a decline of 10% or more). Let’s take a look at the history of corrections by decade, from 1945-2014, and see just how overdue we might be.

The table below shows the percentage of overlapping periods when the month-end level of the S&P 500 has been at least 10% lower than the end-of-month level 1, 3, 6 and 12 months prior. Above-average frequencies are bold and shaded, with below-average frequencies in red.

The data show that decades characterized by an above-average frequency of corrections are reliably followed by approximately two decades of complacency, featuring a sharp decrease in the frequency of corrections.

Therefore, while it may feel as if stocks are overdue for a correction, it is not uncommon for stocks to remain in bull mode without correcting following a decade of volatility and low returns, such as the 1970s and 2000s. Stock values may correct for any of the usual reasons, such as an information shock or overvaluation concerns, but not for the simple reason that a correction is overdue. Thus far the 2010s are playing out similarly to the 1950-1969 and 1980-1999 periods in terms of having a below-average frequency of stock market corrections.