Charts of the Week
S&P 500 Calendar Year Return Versus Intra-Year Decline
Chart of the Week for March 4, 2016 - March 10, 2016
Equity market returns over the past twenty calendar years have been generally positive as measured by the Standard and Poor's 500 Index ("S&P 500"), but from year to year and during any given year, returns can vary greatly. The chart above shows S&P 500 returns (not including dividends) for each full calendar year and the largest market drop from a peak to a trough during each year.
The S&P 500 posted positive calendar year returns for fourteen of the years shown on the chart, had a 0% return in 2011, and had negative returns in five of the years. The average calendar year return was 8%. However, the intra-year drops show that every year was down at some point, and some of those drops were significant. The largest positive return was in 1997 at 31%, but at one point during 1997, the S&P 500 was down -11%. The largest negative calendar year return was in 2008 during the great financial crisis. The 2008 calendar year return was -38%, which was a large drop. However, the 2008 low point was even worse at a -49% return.
Stock market performance can fluctuate wildly, especially over short time periods. In each of the twenty years shown, the stock market had a negative return at some point. Patient investors who stayed invested were ultimately rewarded in 14 of those 20 years.
Posted by: sarah_oz@yahoo.com
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