Historical Frequency of Positive Stock Returns
Read ArticleWhile stocks have the strongest historical returns, many Americans still reeling from the 2008 financial crisis remain afraid of investing their retirement savings in the stock market. This information sheet plots historical S&P 500 data going back to 1926 to show how returns behave over time shows that over a 30-year period, there has never been a time when cash or bonds have outperformed stocks.
Over very short time periods, stocks’ direction can be highly unpredictable. Historically, stocks have been positive on a daily basis 53.0% of the time—little better than a coin flip. However, history also shows the longer the holding period, the greater the likelihood stocks have positive returns.
Exhibit 1: S&P 500 Returns*
| Number of Periods | Percent of Periods | ||||
| Positive | Negative | Total | Positive | Negative | |
| Daily Returns | 12,343 | 10,916 | 23,259 | 53.1% | 46.9% |
| Calendar Month Returns | 693 | 411 | 1,104 | 62.8% | 37.2% |
| Calendar Quarter Returns | 253 | 115 | 368 | 68.8% | 31.3% |
| Calendar Year Returns | 68 | 24 | 92 | 73.9% | 26.1% |
| Rolling 1 Year Returns, Monthly | 816 | 277 | 1,093 | 74.7% | 25.3% |
| Rolling 5 Year Returns, Monthly | 914 | 130 | 1,044 | 87.5% | 12.5% |
| Rolling 10 Year Returns, Monthly | 926 | 58 | 984 | 94.1% | 5.9% |
| Rolling 20 Year Returns, Monthly | 864 | 0 | 864 | 100.0% | 0.0% |
| Rolling 25 Year Returns, Monthly | 804 | 0 | 804 | 100.0% | 0.0% |
Exhibit 2: The Historical Frequency of Positive S&P 500 Returns**
Source: Global Financial Data, Inc. as of 12/31/2017.
* Exhibit 1 uses historical S&P 500 returns over various periods. Daily return data begin on 01/31/1928, and are based on price appreciation only; all other data begin on 01/31/1926 and reflect total returns.
** Exhibit 2 plots the percent of positive S&P 500 rolling periods (from 0-20 years) showing longer timeframes significantly increase the frequency of positive stock market returns. Calculated using monthly rolling holding periods from 01/31/1926 – 12/31/2017.
Interested in more content like this?
Stay up to date on small business trends and the latest in 401(k).