Distribution of US Market Returns
While no one can reliably predict the future, the past may offer perspective on recent market events and the long-term benefits of equity investing. The below chart shows the historical distribution of US market returns since 1926. The performance years are stacked in order of return range.
The graphic highlights that performance over the past two years has been extreme by historical standards, and that, over time, the market’s positive return years have outnumbered the negative return years, with positive performance more concentrated in the higher ranges of returns.
History shows that the stock market has rewarded investors who can bear the risk of stocks and stay committed through various periods of performance.
CRSP data provided by the Center for Research in Security Prices, University of Chicago. The CRSP 1-10 Index measures the performance of the total US stock market, which it defines as the aggregate capitalization of all securities listed on the NYSE, AMEX, and NASDAQ exchanges. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results.