Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
🚨 NDVA surged 43% - these 3 AI stocks could be next Start Free Trial
Are Current U.S. Stock Market Returns Extraordinary?
www.investing.com/analysis/are-current-us-stock-market-returns-extraordinary-200497059
Are Current U.S. Stock Market Returns Extraordinary?
By James Picerno | Jan 07, 2020 03:51PM ET The bull run in U.S. equities in recent years strikes many investors as something other than a run-of-the-mill rally. Although Mr. Market has dispensed several sharp corrections, it’s hard to overlook the fact that a buy-and-hold strategy for, say, an S&P 500 Index fund has been a mostly non-stop party of late. Is that unusual? The answer depends on your definition of “unusual” and your choice of a time window. For some perspective, let’s stack up the latest trailing performances for the S&P against its track record through the decades.
Let’s begin with rolling 1-year returns since 1960 (based on 252 trading days). The current one-year performance (through yesterday, Jan. 6) is 28.2%. That’s an impressive gain, but is it out of the ordinary? Yes, it is. As the chart below shows, the top-quartile distribution of one-year returns for the S&P 500 since 1960 is a 18.3%-to-68.6% range. By that standard, the current one-year advance (indicated by the blue line) is easily in the top quartile—in fact, it’s a top-decile return. (The red line shows the theoretical returns if results followed a normal distribution.)
1-Year S&P 500 Returns
Next, consider how the latest 5-year annualized return compares with history (1260 trading days). The current 9.5% increase is middling relative to history since 1965 — the performance ranks just below the median return. To be sure, earning a 9.5% through time is no one idea’s of weak results. But from the perspective of how the S&P has behaved for this time window the current 5-year performance is hardly extraordinary.
5-Year S&P 500 Returns
Let’s conclude our brief review of performance distributions with the 10-year annualized return, which is currently 11.2% (based on 2520 trading days). That translates to just below the 80th decile – a moderately extraordinary result.
10-Year S&P 500 Returns
In an upcoming post, I’ll continue this series by comparing S&P 500 in terms of risk and reviewing how the current profile stands up vs. history.
Related Articles
Investors Send $3.0 Billion to Investment Grade Corporate Debt Funds
By Refinitiv Lipper - May 26, 2023
During Refinitiv Lipper’s fund-flows week that ended May 24, 2023, investors were overall net purchasers of fund assets (including both conventional funds and ETFs) for the sixth...
Investors Flock to Money Market Funds and Taxable Bond ETFs
By Tom Roseen - May 19, 2023
Investors were net purchasers of fund assets (including those of conventional funds and ETFs) for the fourth week in a row, injecting a net $4.6 billion for the LSEG Lipper...
U.S. Regional Bank Failures: Financial Sector ETFs to Watch
By ETF Central - May 11, 2023
Following an aggressive interest rate hiking cycle throughout 2022 and 2023, cracks began appearing in the U.S. banking sector by March, disproportionately affecting smaller...
Are Current U.S. Stock Market Returns Extraordinary?
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.