Economics and markets

Amid volatility, find safe harbor in patience, perspective

May 06, 2022

Historical probability of negative return for various holding periods
Probability of negative returns, both nominal and inflation-adjusted, for stocks, Treasury bills, and a portfolio of 60% stocks and 40% bonds, over periods of 1, 3, 5, and 10 years. The chance for negative real returns for T-bills was over 40% for all time periods. The chances for a negative real return for all stocks and the balanced portfolio ranged from roughly 9% to 31%, which were lower than for T-bills in all periods.
S&P 500 Index daily returns (January 1, 1980, through December 31, 2021)
Daily returns of the S&P 500 Index from 1980 through 2021. The best and worst trading days occurred close together. Nine of the 20 best trading days occurred in years with negative total returns. Eleven of the 20 worst trading days occurred in years with positive total returns.
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