The chart below is a continuation of our 2014 series and tracks the 10-year rolling annualized returns of the Standard & Poor’s (S&P) 500 Index. Each year represents returns from the previous ten years, and it includes the year presented. For example, the 10-year annualized return through 2019, which is 13.55%, exhibits the annualized rate of return produced by the S&P 500 starting in 2010 all the way through 2019. There are two major takeaways from the chart below:
- Historically, once the long-term mean has been breached on the upside, annualized returns have remained elevated above the mean for an average of almost 18 years.
- Historically, once the long-term mean has been breached on the downside, annualized returns have remained subdued below the mean for an average of almost 10 years. This is significantly lower relative to the time frame on above-mean returns.
We remain highly optimistic about the general trend exhibited by long-term annualized returns. Equity markets have experienced such expansion before, and we’re cognizant of the possibility for it to reoccur over the long term.
