A rolling-return analysis of the S&P 500 back to 1926 found only two losing 10-year stretches, with the best decade returning roughly 600% and the worst losing 40%. Over the long run, the index has averaged annual gains of close to 10%.
The S&P 500 has turned in a losing 10-year stretch only twice since 1926, according to a rolling-return analysis by stock researcher Ben Carlson covering the period between 1926 and 2023. Every other decade-long window in that span closed with an overall gain.
Carlson's analysis found the best 10-year annual return was 21.4%, for the period ending toward the tail end of 1959 — a total return of roughly 600% over the decade. The worst 10-year annual return was a loss of almost 5% per year, ending in the summer of 1939. According to Ben Carlson: "That was bad enough for a 10-year total return of -40%."
The only other 10-year period with a net loss began with the dot-com bubble bursting at the start of the 2000s, running through the Great Financial Crisis hitting toward the end of that decade. Every remaining decade-long window in Carlson's data produced an overall gain for the index.
Despite falling every few years amid wars, business scandals, financial crises and recessions, the S&P 500 has always eventually recovered to set new highs. Over many decades, the index has averaged annual returns of close to 10%. Still, no one knows how it will perform over shorter periods — it could drop sharply tomorrow and stay down for years.
Source: Motley Fool
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