On the other hand, the chances for positive returns from investing in stocks approaches near certainty. Investing in stocks generates a positive return 63% of the time for any calendar month, 75% of the time for any 12-month period, and a greater than 95% chance for any 10-year period.
US STOCK MARKET ANNUALIZED ROLLING PERIOD RETURNS (Jun 1926 – Dec 2017)
* 1 Month returns are not annualized. Figures include dividends and are compounded by geometrically linking monthly returns. Source: Fama-French Market Return Series, June 1, 1926 – December 31, 2017.
Most of the extreme minimum and maximum returns in the above chart occurred during the Depression Era, when the world was a much different place. One thing that hasn’t changed, however, is the average stock market returns over these rolling periods. Regardless of the period examined, each of the rolling time periods return on average between 10% to 12% annually. This is because periods of low returns are followed by periods of high returns, and vice-versa. Stock market returns regress to the mean over time. Simply staying invested improves results with every year invested, regardless of the conditions.
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The information provided here is for general informational purposes only and should not be considered an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. It should not be assumed that recommendations of AthenaInvest made herein or in the future will be profitable or will equal the past performance records of any AthenaInvest investment strategy or product. There can be no assurance that future recommendations will achieve comparable results. The author’s opinions may change, without notice, in reaction to shifting economic, market, business, and other conditions. AthenaInvest disclaims any responsibility to update such views. These views may not be relied upon as investment advice or as an indication of trading intent on behalf of any AthenaInvest representative.
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