Interesting facts about the S&P 500 Index that we thought you should know:

  • The S&P 500 has closed at new all-time highs 54 times this year (as of 9/9).
  • The long-term rate of return for the index is slightly higher than +10% per year.
  • The index is +21% this year (as of 9/9) and if it finishes in the black, it will have earned a positive return in 17 of the last 19 calendar years.
  • Over the last 40 years, the average drawdown in any given calendar year is just over 14%.
  • The absolute worst time to invest in the post WW2 era was October 9th, 2007. Stocks bottomed 17 months later in 2009 down 57% from their highs.
  • By 2013 all losses were fully recovered – meaning the worst possible drawdown for stocks in 70+ years was fully recovered in about 6 years.
    Stocks have declined 20% twice in the last decade (2011 and 2018) and the market fell 34% in 33 days last March (2020) during the initial onset of the pandemic.

Despite a global financial crisis and the ensuing 57% drawdown, two 20% declines and a 34% drop last year, funds invested on October 9th, 2007 would have achieved an annual rate of return of…wait for it…about +10% per year through today – the same exact annual return as the long term average. In our opinion, investing in US stocks continues to be the greatest way for individual investors to compound wealth over time.

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