Probability of positive return on equities by time period

Pat38493

I found this table regarding S&P 500 about the probability of making a positive return on investing for x amount of time.  Question is, is the probability for global index trackers or other markets similar or would it be dramatically different?

1 year - 73%
3 year - 84%
5 year - 88%
10 years - 94%
20 years - 100%

(I guess this is based on past history of course so not guaranteed in future but a reasonable guide).

Qyburn

Pat38493 said:

I found this table regarding S&P 500 about the probability of making a positive return on investing for x amount of time.  Question is, is the probability for global index trackers or other markets similar or would it be dramatically different?

You'd think a tracker would return less that its index as there are costs.

Prism

Some of those percentages make the idea of a 2 year cash buffer that people often talk about a little too limited. If you are really going to try and use cash to ride out a fall it probably needs to be quite a bit bigger.

eskbanker

Pat38493 said:

I found this table regarding S&P 500 about the probability of making a positive return on investing for x amount of time.  Question is, is the probability for global index trackers or other markets similar or would it be dramatically different?

1 year - 73%
3 year - 84%
5 year - 88%
10 years - 94%
20 years - 100%

(I guess this is based on past history of course so not guaranteed in future but a reasonable guide).

https://www.nutmeg.com/nutmegonomics/increasing-your-chances-of-positive-portfolio-returns-the-facts-about-long-term-investing  features charts based on MSCI World Equity Mid and MSCI Large Cap Total Return in GBP, 1 January 1972- July 2022, with broadly similar figures.

Hoenir

Historically corrections (10%) occur every 2 years while bear markets (25%) every 6 years. 12 years being the time to hold equities to be sure of a postive return (with income reinvested).  The "QE" era has led many to believe that there's a new paradigm. Most likely as the unwinding continues there'll be a return to more volatile equity markets.