During times of extreme volatility, our nerves can get the better of us and we might start thinking, “Why don’t I sell everything and get out of investing?” We thought this perspective might be a little helpful in demonstrating why we invest:
Last month (April 2022) the S&P 500 lost 8.7% (total return) – the index’s worst monthly performance since March 2020.
Over the long-term, however, the S&P 500 has gained +12.3% per year (total return) for the 100 months through 4/30/2022, gained +9.8% per year (total return) for the last 200 months, gained +8.8% per year (total return) for the last 300 months, and gained +10.8% per year (total return) for the last 400 months.
While historical returns certainly don’t guarantee future results, this long-term perspective can help provide context during the current market conditions.
The S&P 500 consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value-weighted index with each stock's weight in the index proportionate to its market value (source: “By The Numbers” Research)