The last year has been an annus horribilis for most people. In investment terms, however, the last 12 months have been as good as it gets, producing once-in-a-lifetime returns.

The S&P 500 has gained more than 75 per cent, the best 12 months in the history of the index. The Dow, an older index, has just enjoyed its best 12-month returns since the recovery from the Great Depression in March 1934.

Those who say they saw this coming are guilty of hindsight bias, says Ritholtz Wealth Management's Nick Maggiuli. Just days before stocks bottomed last March, he conducted a Twitter poll asking how long it would take for the S&P 500 to hit new all-time highs. Most said it would take more than two years; only 11 per cent said it would be less than one year.

History shows it’s good to buy when markets are terrified, although it gave no indication that returns would be this good. As Maggiuli points out, we have lived through the stock market equivalent of Halley’s comet.