Thoughts in Charts: Performance Headlines

This First Trust chart came across my desk. While the 2022 year is only through March 31, I think the preceding years paint an interesting picture.

Historical performance charts like these are very hard to summarize in a headline. I tried to come up with a few that point out the key points about this S&P 500 Index, a market weighted index of the largest 500 publicly traded companies in the US. None of the following were short enough or eye catching:

  • “Returns Can Be All Over the Place During the Year”
  • “75% of the last 40 Calendar Years have Generated Positive Returns”
  • “15x in in the Last 40 Years, we have Seen Intra Year Returns with a Loss of Greater than 15% but, by Calendar End, they have only Landed at a Loss that Large Twice.”

Truthfully, I wasn’t trying that hard on that last one…

People frequently ask me what I think the market is going to do. I struggle with that question. Historical data creates a foundation and projective algorithms create future scenarios, but none of that predicts what is going to happen.

Here’s my overall answer. I think there is an entire architecture built around the stock market that pushes it, over the long-term, upward.

Time, though, is a big deal. It’s a significant component of decisions about how much risk to take. Risk is a significant component of the opportunity for return. To be steady investors, we must see these three things as deeply linked.


Over the next few weeks, I’m going to focus on historical return information – framing it up in different ways and challenging us to see the long-term picture, rather than this week’s headlines.

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