S&P Index from 1825 to 2010

By Prieur du Plessis, on January 3rd, 2011 posted in: Investment, Stocks

The graph below is an interesting depiction of the S&P Index’s annual returns since 1825. Of the 186 years 70% were positive and 30% negative. The Index’s total return for 2010 was +15.06%. Although interesting, the chart offers little guidance as to where the 2011 block will be placed.

Click here or on the image below for a larger chart.

Sources: William N. Goetzmann, Roger G. Ibbotson and Liang Peng, A new historical database for the NYSE 1815 to 1925: Performance and predictability, Journal of Financial Markets, Volume 4, Issue 1, January 2001, Pages 1-32; Value Square Asset Management; and Plexus Asset Management.

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Matt Taylor

January 4, 2011 at 12:41 am

I like the way the years are displayed in each histogram bar, but the thing that is misleading is that the histogram gives the impression that returns are skewed positive… until you realize that a -50% return in one year takes a +100% return the next year to bring you back to zero.

That’s why it’s better to use , but I reckon that would just confuse folks who are not familiar with them.