What should you know?
Here we show the distribution of annual returns of the S&P 500 since 1950:
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- 19 years produced a negative annual return and 54 were positive. That means that since 1950, markets have risen 74% of the time and fallen in only 26% of years. 2022 was one of those years.
- Surprisingly, only 6 out of the 73 calendar years have provided a return between 6% and 10%.
- The S&P 500’s average annual return since 1950 was 7.7% per annum, excluding dividends.
- The average annual return in the year following a negative year was +15.3%.
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Why should you care?
Market performance is impossible to predict, so don’t be tempted to try.
Negative annual returns are normal and as long as you invest your money correctly, they should not be feared.
If you are invested for the long term (which you should be), then the odds are stacked firmly in your favour. Stick to the plan and everything will be ok.
