On A Large Enough Time-Frame, The S&P 500 Has Always Been Remarkably Predictable

If you think the S&P 500 has been unpredictable in recent years, you probably aren’t looking at the big picture. A Wealth of Common Sense’s Ben Carlson recently discussed the rolling 30-year annual returns for the S&P 500 throughout history. When looking at market history through a 30-year window, the S&P 500 has been incredibly consistent.

Despite a number of market booms and busts — World War II, the Great Depression, the Financial Crisis and any number of major economic disruptions — the 30-year rolling annual return of the S&P 500 has always stayed between around 8.0 percent and 15.0 percent.

Even 30-year returns starting on any date throughout the early 1980s are remarkably average.

“If you look at the 30-year annual return that started in 1982 — which is when many say that bull market started — the 10.9 percent/year performance from 1982–2012 ranks right in the middle of the historical numbers,” Carlson explained.

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Even if you look at average annual returns in the three non-overlapping 30-year periods since 1926, they are remarkably consistent:

1926–1956: +10.7 percent 1956–1986: +9.6 percent 1986–2016: +9.9 percent

As always, future returns are never a guarantee. But when things seem like they are unraveling in the market, the past can certainly provide some comfort.

So far this year, the SPDR S&P 500 ETF Trust SPY is up 0.1 percent.

Disclosure: The author holds no position in the stocks mentioned.