Stock Markets Returns Following Terrible Months

A reminder that the stock market does rebound. Since 1926, the general stock market, as represented by the S&P 500 - the largest 500 stocks in the US market, has had 61 months with a monthly return of -7% or worse. The average returns of the following years were always positive. The subsequent 1, 3, 5 and 10 year average returns are in the data below: 

S&P 500 Start Date January 1926 End Date December 2009 Threshold -7% Months at or Below Threshold 61 Months in the sample  1008 Annualized Average Compound Return Over Subsequent Periods (starting the next month) 1 Year 7.30% 3 Years 9.10% 5 Years 9.90% 10 Years 8.90%

The S&P data are provided by Standard & Poor's Index Services Group. Indexes are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Not to be construed as investment advice