I like numbers so I don’t shy away fro the fact that I like statistical analysis and data. As a result, I’ve collected some data on the stock markets that may be interesting to some people.
Before I show you the stock market historical data, I want to put forth my disclaimer: This data has been accumulated over many years and I cannot guarantee the accuracy of the data. I think the data is still interesting so I hope you can find some interest in it.
|
Year |
Cdn Equities (TSE 300) |
Int’l Equities (MSWI) |
|
1938 |
9.1% |
34.4% |
|
1939 |
0.2% |
8.5% |
|
1940 |
-19.1% |
-10.0% |
|
1941 |
1.9% |
-11.7% |
|
1942 |
14.0% |
21.1% |
|
1943 |
19.7% |
25.6% |
|
1944 |
13.5% |
19.6% |
|
1945 |
36.1% |
36.1% |
|
1946 |
-1.5% |
-16.5% |
|
1947 |
0.3% |
5.3% |
|
1948 |
12.1% |
5.1% |
|
1949 |
22.6% |
29.8% |
|
1950 |
48.4% |
24.6% |
|
1951 |
24.0% |
21.4% |
|
1952 |
-0.4% |
12.0% |
|
1953 |
2.2% |
-0.8% |
|
1954 |
39.1% |
51.4% |
|
1955 |
27.8% |
35.6% |
|
1956 |
13.2% |
2.4% |
|
1957 |
-20.6% |
-9.2% |
|
1958 |
31.3% |
41.3% |
|
1959 |
4.6% |
10.4% |
|
1960 |
1.8% |
3.8% |
|
1961 |
32.8% |
34.6% |
|
1962 |
-7.1% |
-5.8% |
|
1963 |
15.6% |
23.1% |
|
1964 |
25.4% |
15.8% |
|
1965 |
6.7% |
12.5% |
|
1966 |
-7.1% |
-9.4% |
|
1967 |
18.1% |
23.6% |
|
1968 |
22.5% |
10.3% |
|
1969 |
-0.8% |
-8.3% |
|
1970 |
-3.6% |
-1.6% |
|
1971 |
8.0% |
12.2% |
|
1972 |
27.4% |
18.6% |
|
1973 |
0.3% |
-14.5% |
|
1974 |
-25.9% |
-27.2% |
|
1975 |
18.5% |
40.8% |
|
1976 |
11.0% |
24.2% |
|
1977 |
10.7% |
-0.3% |
|
1978 |
30.0% |
21.0% |
|
1979 |
45.0% |
14.0% |
|
1980 |
30.0% |
33.0% |
|
1981 |
-10.0% |
-5.0% |
|
1982 |
6.0% |
21.0% |
|
1983 |
36.0% |
25.0% |
|
1984 |
-20.0% |
16.0% |
|
1985 |
25.0% |
40.0% |
|
1986 |
9.0% |
29.0% |
|
1987 |
6.0% |
5.0% |
|
1988 |
11.0% |
10.0% |
|
1989 |
21.0% |
21.0% |
|
1990 |
-15.0% |
-12.0% |
|
1991 |
12.0% |
22.0% |
|
1992 |
-1.0% |
6.0% |
|
1993 |
33.0% |
22.0% |
|
1994 |
-0.2% |
11.9% |
|
1995 |
14.5% |
18.0% |
|
1996 |
28.0% |
12.5% |
|
1997 |
15.0% |
13.7% |
|
1998 |
-1.6% |
22.8% |
|
1999 |
31.7% |
18.4% |
|
2000 |
7.4% |
-9.9% |
|
2001 |
-12.6% |
-12.9% |
|
2002 |
-12.4% |
-21.9% |
|
2003 |
26.7% |
9.4% |
|
2004 |
14.5% |
6.9% |
|
2005 |
24.1% |
7.3% |
|
2006 |
17.3% |
20.2% |
|
2007 |
9.8% |
-7.1% |
|
2008 |
-33.0% |
-25.4% |
|
2009 |
35.1% |
11.1% |
|
2010 |
17.6% |
6.5% |
|
2011 |
-8.7% |
-9.7% |
|
2012 |
7.2% |
14.8% |
Let’s take a look at the distribution of performance
| Calendar returns |
% of time (Cdn) |
% of time (Int’l) |
| From -20% to -30% |
4.4% |
4.0% |
| From -10% to -20% |
7.8% |
6.7% |
| From 0% to -10% |
14.4% |
16.0% |
| From 0% to 10% |
20.0% |
14.7% |
| From 10% to 20% |
21.1% |
24.0% |
| From 20% to 30% |
16.7% |
22.7% |
| From 20% to 40% |
12.2% |
6.7% |
| From 40% to 50% |
3.3% |
4.0% |
| From 50% to 60% |
0.0% |
1.3% |
|
100.0% |
100.0% |
Interesting observations on a calendar year basis (from 1938 to 2012):
Like most distribution charts, most of the calendar year returns fall between -10% and +30%.
Generally speaking, markets spend more time making money and less time losing money
- Markets have been positive 73.3% of the time
- Markets have been negative 26.6% of the time
Investing is less about perfection and more about probabilities.
- Investors who buy and hold have a historical probability of making money 73.3% of the time. This is good data for passive investors.
- Investors who are trying to out guess the market need to win more than 73.3% of the time to do better than the markets. That’s pretty challenging.
Markets tend to rebound after bad years
- The TSX has experienced back-to-back negative years only twice over the past 75 years.
- The TSX was negative 19 out of 75 calendar years.
- 17 out of those 19 years, the market bounced back with positive return in the following calendar year
- The average return of years that follow a negative year was 14.3%
- Internationally the data is very similar but there has been a little more volatility and also greater downside risk.
The bottom line is that markets have a very high chance of rebounding the calendar year following a negative year.
That’s just a few of my observations. Do you see any interesting observations I may have missed?
