Historical Stock Market Data

I like numbers so I don’t shy away fro the fact that I like statistical analysis and data.  As a result, I’ve collected some data on the stock markets that may be interesting to some people.

Before I show you the stock market historical data, I want to put forth my disclaimer: This data has been accumulated over many years and I cannot guarantee the accuracy of the data.  I think the data is still interesting so I hope you can find some interest in it.

Related article: The Five Realities of the Stock Market

CPP pensionable earnings

 Before After

Let’s take a look at the historical distribution of performance:

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Interesting observations on a calendar year basis (from 1938 to 2014):

2014 was another good year for Stock Markets.

Like most distribution charts, most of the calendar year returns fall between -10% and +30%.

Generally speaking, markets spend more time making money and less time losing money

  • Markets have been positive 73.9% of the time
  • Markets have been negative 26.1% of the time

Investing is less about perfection and more about probabilities.

  • Investors who buy and hold have a historical probability of making money 73.9% of the time. This is good data for passive investors. 
  • Investors who are trying to out guess the market need to win more than 73.9% of the time to do better than the markets.  That’s pretty challenging.

Three years of consecutive growth

  • Markets go up and down.  Investors have enjoyed solid market returns since 2011.  We are now almost 4 years into a bull market.
  • The longer the bull market goes, the greater the likelihood of a market correction or even a bear market.
  • This is not a prediction by any means but just a reminder that volatility is a reality with the markets.

Markets tend to rebound after bad years

  • The TSX has experienced back-to-back negative years only twice over the past 75 years.
  • The TSX was negative 19 out of 76 calendar years.
  • 17 out of those 19 years, the market bounced back with positive return in the following calendar year
  • The average return of years that follow a negative year was 14.3%
  • Internationally the data is very similar but there has been a little more volatility and also greater downside risk.

The bottom line is that markets go up and down.  As much as we hope markets will stay positive, the risk of a correction is there.  When it happens, there is also a very high chance of rebounding the calendar year following a negative year.

That’s just a few of my observations.  Do you see any interesting observations I may have missed? 

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites Group Benefits Online and Advisor Think Box.

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