How Often Has the Market Provided Positive Returns?

A handful of six-sided dice. Entering the market doesn't have to be a krapshoot with long-term investing approaches.

Voisard Asset Management Group believes in a long-term investing approach. Why? Because it works. The more difficult question to answer is “How long is long-term?” To answer this, we will look at how the market has performed over various periods of times since 1930 (Source: J.P. Morgan market insights).

Financial graphs showcasing multi-month and year long-term investing patterns.

Dating back to 1930, 60% of one-month returns have been positive. These odds are fantastic compared to a casino, but it is not a bet people are typically willing to put their house on. It’s safe to say, we do not consider one month “long-term investing.”

When looking at every one-year period since 1930, investors achieved positive returns 75% of the time. Over 5-year periods, we see positive returns 91% of the time. Ten-year market returns were positive 98% of the time, and finally, there has never been a 15-year period where market returns were negative. That doesn’t imply you shouldn’t take any risk if your time horizon is less than 15 years, but it shows that individuals with short-term investment timelines should consider more stability than investors with much longer time horizons.

While we can’t predict what returns will be over the next 15 years, we are confident that they will be positive. Investors who ignore the noise and stick to the plan are the ones who typically come out ahead. As your time horizon shortens, the risk in your portfolio should be adjusted accordingly. Do you feel unsure you have the right amount of risk in your portfolio? 

We would be happy to conduct a complimentary review to help determine if your current structure is appropriate for your goals and time horizon. As we have said many times before, the time to get your allocation right is while stocks are high and things are going well, and looking at the markets today, it feels like a good time to do so.

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