Monthly growth of wealth ($1), 1926–2013
In US dollars. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results. US Small Cap Index is the CRSP 6–10 Index; US Large Cap Index is the S&P 500 Index; Long-Term Government Bonds Index is 20-year US government bonds; Treasury Bills are One-Month US Treasury bills; Inflation is the Consumer Price Index. CRSP data provided by the Center for Research in Security Prices, The S&P data are provided by Standard & Poor’s Index Services Group. University of Chicago. Bonds, T-bills, and inflation data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield).
History shows that the stock market has rewarded investors, more frequently than not, who can bear the risk of stocks and stay committed through various periods of performance. The graphic below shows the historical distribution of US market returns since 1926, and that the investing glass, was more than half full. The performance years are stacked in order of return range. The graphic highlights 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.
Distribution of U.S. Stock Market Returns
Bryan Rogowski is the principle and founder of Rogowski Wealth Management and a former retirement plan expert at the U.S. Government Accountability Office (GAO).