As we prepare to start a holiday weekend to honor those who made the ultimate sacrifice for our country, I wanted to give a little perspective on the stock market. As you know, all that we’ve heard for the last ~11 straight weeks has been bad news, and while the stock market has steadily risen since it hit bottom almost 2 months ago, we’re still way down from the all-time highs reached in February.
However, the stock market is not about the short term, it’s about the long term. So, here are the returns of the S&P 500 (a better measure of the stock market than the Dow Jones Industrial Average which is composed of only 30 stocks) over a few time periods ending today (meaning that all of these returns include the huge drop that happened in March):
1 year: 3.2% return
3 year: 24.1% (this translates into a 7.5% average annual return)
5 year average: 38.7% (6.8% average annual return)
10 year average: 171.7% (10.5% average annual return!)
I hope that this makes you feel a little better. So take heart, stay safe, and have a great holiday weekend!