As I’ve written in many previous email blasts, we’re going to be bumping along between a couple ‘guard rails’ – 23,000 and 24,000 until the market gets some good news. And while we’re traveling this crazy road, it’s sometimes difficult to see the bigger picture, especially when the media is blaring doom and gloom 24/7.
Let’s take a look at a little history – perspective – so folks can perhaps breathe a bit easier. At least for this week.
Since 1926, the US stock market has rewarded investors with an average annual return of about 10%. And it’s important to remember that returns in any given year may be sky-high, extremely poor, or somewhere in between.
• Annual returns came within two percentage points of the market’s long-term average of 10% in just six of the past 94 years.
• Yearly returns have ranged as high as up 54% and as low as down 43%.
• Since 1926, annual returns have been positive 69 times and negative 25 times.
It’s important to realize that rolling 20 year returns are 100% positive. This is an important point to understand when investing – for your whole life – not just the next 5 years.
The graph below shows the data mentioned above. If you have any concerns about your allocation, don’t hesitate to give us a call.