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Market Perspective Charts

Market Perspective Charts

May 25, 2022

Crisis and Events

S&P 500 Index: 1970-2022

This chart shows the growth of $10,000 based on S&P 500 Index performance over the last several decades. We believe looking at the market's overall resiliency through major crises and events helps to gain a fresh perspective on the benefits of investing for the long term.

S&P 500 Index: 1970-2022

Source: Bloomberg. Data from 12/31/1969 - 3/31/22. Past performance is no guarantee of future results. This chart is for illustrative purposes only and not indicative of any actual investment. The S&P 500 index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. Stocks are not guaranteed and have been more volatile than the other asset classes. These returns are total returns and were the result of certain market factors and events which may not be repeated in the future



Staying the Course

Investors tend to see short-term volatility as the enemy. Volatility may lead many investors to move money out of the market and "sit on the sidelines" until things "calm down." Although this approach may appear to solve one problem, it creates several others:

  1. When do you get back in? You must make two correct decisions back-to-back; when to get out and when to get back in.
  2. By going to the sidelines you may be missing a potential rebound. This is not historically unprecedented; see chart below.
  3. By going to the sidelines you could be not only missing a potential rebound, but all the potential growth on that money going forward. 

We believe the wiser course of action is to review your plan with your advisor(s) and from there, decide if any action is indeed necessary. This placates the natural desire to "do something," but helps keep emotions in check. 

Intra-year declines vs. calendar year returns

Source: Bloomberg. First Trust L.P. *As of 3/31/22. Past performance is no guarantee of future results. The benchmark used for the above chart is the S&P Index. The S&P 500 index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. Returns are based on price only and do not include dividends. This chart is for illustrative purposes only and not indicative of any actual investment. These returns are total returns and were the result of certain market factors and events which may not be repeated in the future 



Stocks Won!

This chart shows the cumulative return of different asset classes following the S&P 500 Index market peak before the Financial Panic of 2008. We believe a comparison of asset class performance through the financial panic and subsequent recovery helps to show the benefits of investing for the long-term. 

Cumulative Return (%) Graph

Source: Standard & Poor's, Bloomberg, Federal Housing and Finance Agency (FHFA), Bureau of Labor Statistics (BLS), U.S. Treasury, New York Mercantile Exchange (NYM). Past performance is no guarantee of future results. Monthly data September 2007 - March 2022. Housing data through January 2022 and CPI data through February 2022 (latest data available). Stocks represented by the S&P 500 Total Return Index. Gold represented by gold spot price per Troy ounce. 10-Year Treasury represented by 10-year Treasury note constant maturity total return index. CPI represented by the BLS Consumer Price Index. Home prices represented by the FHFA Home Price Index. Cash represented by the 3-month Treasury bill constant maturity total return index. Oil prices represented by the NYM Generic 1st Crude Futures Index. This chart is for illustrative purposes only and not indicative of any actual investment. The asset classes shown here offer different characteristics in terms of income, tax treatment, capital appreciation, and risk. Common stocks are subject to risks, such as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of the stock market. An investment in commodities involves specific risks including but not limited to: global supply and demand, depletion of natural resources, excess capacity, production costs, economic recession, domestic and international politics, currency exchange rates, government relations, volatile interest rates, consumer spending trends, and overall capital spending levels. Fixed income securities are generally subject to credit risk, income risk, and interest rate risk. Credit risk is the risk that an issuer may default on its obligation to make principal and/or interest payments when due. Income risk is the risk that income could decline during periods of falling interest rates. Interest rate risk is the risk that the value of fixed income securities will decline because of rising interest rates. Homebuilding companies can be significantly affected by the national, regional and local real estate markets. 



History of US Bear & Bull Markets

Daily Returns Since 1942

This chart shows daily historical performance of the S&P 500 INdex throughout the US Bull and Bear Markets since 1942. We believe looking at the history of the market's expansions and recessions helps to gain a fresh perspective on the benefits of investing for the long-term. 

  • The average Bull Market period lasted 4.4 years with an average cumulative total return of 154.9%. 
  • The average Bear Market period lasted 11.3 months with an average cumulative loss of -32.1%.

Bear and Bull Market Imagery

Bear and Bull market graph

Source: Bloomberg. First Trust L.P. Daily returns from 4/29/1942 - 3/31/22. *No annualized return shown if duration is less than one year. Past performance is no guarantee of future results. These results are based on daily returns - returns using different periods would produce different results. The S&P 500 index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. This chart is for illustrative purposes only and not indicative of any actual investment. These returns are total returns and were the result of certain market factors and events which may not be repeated in the future 


S&P Index: Positive and Negative Years

Since 1926

Below we look at the S&P Index since 1926 and compare the average annual total returns of the last 96 years. Although stock market returns fluctuate significantly, since 1926, the S&P 500 Index produced positive return 74% of the time, with an average of 21.3%. In 26% of those years the return was negative, with an average of -13.2%.

S&P Index: Positive and Negative Years

Source: Bloomberg Associates. Past performance is no guarantee for future results. This chart is for illustrative purposes only and not indicative of any actual investment. The S&P 500 index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. These returns are total returns and were the result of certain market factors and events which may not be repeated in the future 



Probability of Positive Returns

S&P 500 Index - Since 1937

Investing in the stock market can be volatile. For this reason, we believe it is important to keep proper perspective when stocks rise or fall over short periods of time. History has shown that the odds of achieving a positive return are dramatically increased the longer the investment horizon.  

S&P 500 Index - Since 1937

Source: Bloomberg, Data from 12/31/1936 - 3/31/22. Past performance is no guarantee for future results. This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred while investing. These returns are total returns and were the result of certain market factors and events which may not be repeated in the future. This chart is based on the total returns of the S&P 500 Index. The S&P 500 index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index.


S&P 500 Daily Volatility 

# of Days With > 1% Moves

S&P 500 Daily Volatility 

Source: Bloomberg, First Trust Advisors L.P. Data from 2009 - 3/31/22. *Average is from 2009-2021. This chart is based on the price returns of the S&P 500 Index. Past performance is no guarantee for future results. This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred while investing. This chart is based on the total returns of the S&P 500 Index. The S&P 500 index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. The index cannot be purchased directly by investors.


S&P 500 Index 

Performance After Its Worst Days

The chart below lists the 15 largest single-day percentage losses in the S&P 500 Index since 1960 and the subsequent price performance of the index for the 1-, 3-, 5-, and 10-year periods that followed. Looking back, the S&P Index produced positive price appreciation, on average, in each of the periods. While stocks have sometimes experienced extreme volatility over short periods of time, we believe investors who remain committed to their long-term investment plan will continue to be rewarded over longer periods. 

S&P 500 Index Performance During and After Extreme Down Days

Source: Bloomberg, Performance is price return only (no dividends). As of 3/31/22. Past performance is no guarantee for future results. This chart is for illustrative purposes only and not indicative of any actual investment. Returns are average annualized returns, except those for periods of less than one year, which are cumulative. Index returns do not reflect any fees, expenses, or sales charges. Stocks are not guaranteed and have been more volatile than the other asset classes. These returns were the result of certain market factors and events which may not be repeated in the future. The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. Investors cannot invest directly in an index. 


A History of Market Corrections

Investors like to avoid stock market declines at all costs, but declines are an inevitable part of investing. A little historical background can help put stock market declines in perspective.

S&P 500 Index 1942-2022

Source: Bloomberg, Performance is price return only (no dividends). As of 3/31/22. Past performance is no guarantee for future results. This chart is for illustrative purposes only and not indicative of any actual investment. Investors cannot invest directly in an index. *Correction cycles are determined by identifying market declines in excess of the minimum declines noted above. The cycle ends when there is a recovery of the magnitude of the minimum decline needed for that correction size (i.e., a recovery of greater than 5%, 10% or 20%). After that recovery is noted, the algorithm begins searching for the next decline to start the cycle again. *Measures from the date of the market high to the date of the market low. The S&P Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. The Dow Jones Industrial Average* (The Dow*), is a price-weighted large-cap U.S. stock market performance. The index xovers all industries except transportation and utilities.