The US stock market has a fascinating distribution of returns that can be quite rewarding for the persistent investor.
The nature of annual stock market returns is a paradox, unpredictable yet reassuring at the same time. This can discomfort investors during market downturns, but the consistent history of positive returns provides a comforting counterbalance.
The Tempting Distribution of US Stock Market Returns
There is a noticeable pattern in the frequency of “up” years compared to “down” years in the US stock market. Looking back from 1926 to 2022, “up” years have outnumbered their counterparts significantly. During this period, the market has averaged gains of 9.9% per year.
Past performance is not a guarantee of future results.
The Cycle of Loss and Gain: A Historical Perspective
Interestingly, about two-thirds of the down years were followed by up years. A recent example of this cyclical trend is the 5.0% loss in 2018, which was succeeded by a 30.4% gain in 2019.
The Long-term Commitment: The Key to Rewards
The stock market tends to reward those investors who can endure the yearly fluctuations and remain dedicated to their long-term investment plans.
Interested in learning more about the stock market dynamics or need further information?
Remember, understanding the rhythm of the market is the first step towards successful investing. We’re here to help guide you through the investment landscape. Contact GSB Capital to discuss your requirements.
THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.
THE VALUE OF YOUR INVESTMENTS CAN GO DOWN AS WELL AS UP AND YOU MAY GET BACK LESS THAN YOU INVESTED.
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