Investing

Historical stock market data

Historical stock market data

I like numbers so I don’t shy away from 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

Bond Returns vs. Stocks 1988 – 2019

YearBondsStocks(TSX)
20196.922.9
20181.4-8.9
20172.59.1
20161.721.1
20153.5-8.3
20148.810.6
2013-1.513.0
20123.67.2
20119.7-8.7
20106.717.6
20095.435.1
20086.4-33.0
20073.79.8
20064.117.3
20056.524.1
20047.114.5
20036.726.7
20028.7-12.4
20018.1-12.6
200010.27.4
1999-1.131.7
19989.2-1.6
19979.615.0
199612.328.3
199520.714.5
1994-4.3-0.2
199318.132.5
19929.8-1.4
199122.112.0
19907.5-14.8
198912.821.4
19889.811.1

Interesting observations on a calendar year basis (from 1938 to 2018):

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 73.7% of the time
  • Markets have been negative 26.3% of the time

Investing is less about perfection and more about probabilities.

    • Investors who buy and hold have a historical probability of making money 73.7% of the time. This is good data for passive investors.
  • Investors who are trying to out guess the market need to win more than 73.7% of the time to do better than the markets. That’s pretty challenging.

Three years of consecutive growth

  • Markets go up and down.
  • The longer any 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 20 out of 79 calendar years.
  • 18 out of those 20 years, the market bounced back with positive return in the following calendar year
  • The average return of years that follow a negative year was 14.6%
  • 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 always there. You can’t accurately predict when it’s going to happen but 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?

Comments

  1. PETER

    Thanks Jim great research

  2. jeff white

    Great observations Jim.
    Bottom line dont sell into panic during corrections.

    • Shawn

      Buy more following a correction and hang on for the ride

  3. Bob sywy

    Thanks Jim. I tell anyone that says it is risky that it has always bounced back and staying in is the smart thing to do.

  4. Duncan Badger

    If you want historical data to comment on you should look at the Andex Charts. I think rolling averages over longer periods of time is important returns information.

  5. Beverley L Kennedy

    Good observations to keep in mind when market wobble

  6. Maureen

    I remember the dot.com bubble in the late ’90s because I lost a third of my defined contribution pension. It’s seared into my memory because my employer had just forced us to move from a defined benefit plan in 1998 & very soon after we had that huge loss. I don’t see that reflected in your chart and am wondering if 1999 was -31.7? Then of course the same thing happened in 2008.

    • Denise

      The return rate is based on only some companies – those that are part of the TSX index. If I recall correctly, the dotcom companies were not included. In the same way today, the marijuana companies are not a part of the index so their wild ride in the last couple of years are not reflected. Jim, would you please correct me if I’m wrong?

    • Bruce

      The returns Jim used are for the TSX, which does not hold a lot of tech stocks. You would have seen the impact of the “tech wreck” a lot more on the S&P500 and especially the NASDAQ. It does illustrate the benefits of diversification.

      You can model returns for different markets here:
      http://www.ndir.com/cgi-bin/downside_adv.cgi

  7. Darcy N

    Thanks Yih,
    Another enlightening article.

    I love data and but not good at mining it.
    Appreciate your efforts.
    I wonder how many of the down years had positive return in them such as 2018?

  8. Arlowene Livingston

    Hi Jim

    Very interesting article.

    Question: I am a healthy widow in my “80’s” with a maxed out TFSA.
    What is your opinion on purchasing Enbridge stocks within
    it?

    • Stats Freak

      Do not put all your eggs in one basket! Purchase ETFs, and ones that pay you monthly to own them (ie: monthly dividends)

  9. Rick

    I was surprised to see that if you invested $10,000 in a fund that gave you the yearly returns shown for either bonds or stocks you would only have an ending value difference of $12,870 ($100,668 for stocks and $$87,799 for bonds, using the 30 years of data that shown in your article)

    I expected a bigger difference/advantage for stocks

    • Jeremy

      Bond returns were very high in the early 90’s, before the impacts of the Bank of Canada’s active inflation targeting, started in 1991, took hold. Since 2003, after the early 2000s stock market correction and with bond returns reflecting current monetary policy, average annual return rates have been 4.5% for bonds and 8.7% for stocks – a much larger differential.

  10. Kathy Leblanc

    Reassuring for a new retiree

  11. Myles Ballendine

    Another possible conclusion from your data is to invest immediately AFTER a down year to improve your return. e.g.
    1) If you invested $10,000 Jan 1st 2008, you would have $14,371 at the end of 2018.
    2) If you invested $10,000 Jan 1st 2009, you would have $21,449 OR 50% MORE at the end of 2018 even though you were invested for one year less.

  12. John

    My secret is the 7 year skip.
    After 2000 I have withdrawn from the market before the seventh year. For example,
    2001 withdrew from market
    2008 withdrew
    2015 withdrew
    2022 next one
    There are some slum years between but very few, plus I have been saved by the main drops. 7 is a very important number and if you can use it property it will be of great advantage to you. It has for me big time.
    John

    • Bruce

      That’s a simple and interesting approach John. Do you completely liquidate to cash and then a year later, move 100% of the cash back into the markets?

      • John

        Well Bruce that was the basic approach. In the past I did not move 100% out of the market, perhaps average 70-80%. The 20-30% left in the market of course did a major drop, however, left in the market it usually did a correction within 2 years or so.
        Next time I will go for 100% out of the market for these main reasons,
        1. True what was left in the market did recover, but if it had it been pulled out, the recovery would of been faster and the total yield would of been greater in the same period of time.
        2. During this withdrawal, cash interest would of been lower, but my principle was safe and guaranteed, plus a bit of interest was added to it. In other words I was still ahead and moving onward positively..
        I believe that the number one rule for an investor should always be the perseveration of the principle and then figure out probabilities to increase it without gambling.

  13. Lorraine

    Thank you Jim for this excellent research. I believe that 2019 will be a good year.

  14. Peter H Stephenson

    Thanks, good summary. It is worth noting that bond returns were only negative 3 times in this period, and only once was that more than 1.5% (but that was only 4.3%). So, while making bigger returns on bonds didn’t (and won’t likely) happen, losing money on bonds over that period was nearly impossible. For a person with a more limited horizon (retired, over 65) this is important. And the older you get, the more important it becomes. What this means in planning varies by person, but in general, it means that after good years in equities, a significant amount of profits should be moved to fixed income. And if you NEVER want to lose any of that, buy GIC’s or short term bonds held until maturity. If you are younger, and can afford the risk, just stay in the equities market until your risk reward horizon gets shorter.

  15. Peter H Stephenson

    Another conclusion would be that if you have a short term horizon and can’t really afford to lose much, then stay with bonds. The likelihood they will drop is not high, and the amount they will probably drop is not high either.

  16. Conn

    Thanks for sharing the analysis Jim. Great context considering all the week to week drama going on these days.

  17. LH

    hi,

    I think what is most interesting about numbers is that they are meaningless without context, interpretation, analysis.
    The time interval makes a big difference.
    Your first interval 1088-2018 shows that it only goes up. almost 466% (reason being that money makes more money until it is forced to stop)
    Within, you can take any interval and it may go up or down. It does this even within 1 minute.
    How much money you depend on how much money you bet(yes I said bet) on what stock (some will pop 200% fast) divided by the time period.
    Your second intervals the 1 year.
    Of cause unless you bought the index (we are only talking about index as individual companies will do their own thing) at the beginning of the year, that number is not useful.
    Your 2018 shows -8.9% but if my year was Feb1 to Feb1 , it’s even.
    With index, as with companies, it should be bought on evaluation and sold on evaluation.
    So the time interval always depend on the buy sell date.
    So if you bought around christmas, you are making money right now, but if you bought around the summer you still not even.
    In actuality you can make the same amount of money in 1 day as in 10 years.
    I really don’t call this investing, I think almost everyone is a trader. That is very different and changes the market.
    This is how we and up with down on good news and up on bad.
    Add computers and the whole idea of shortselling and for these reasons, it’s unpredictable.
    Also, you can only buy at the low(christmas), if you sold before. Unless you have money tree.

  18. Dale Roberts

    Love this kind of ‘stuff’ thanks. Bonds up whenever they were needed. So many great observations in there, that help investors keep that proper long-term perspective. Markets mostly go up, ha.

    Thanks for the great article I am sharing this on Twitter and LinkedIn and elsewhere.

  19. Roger Noseworthy

    Great info Jim!

  20. A

    Thanks Jim

  21. Isabelle

    thanks! Can I make a suggestion: I would love that you add a new column with the SP500 return (in CAD).

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