Stats › Long run returns › Holding period odds
Odds of a loss by holding period
Over a single year the stock market is close to a coin flip with a tilt in your favour. Stretch that year into five, then ten, then twenty, and the tilt gets a lot stronger. That's the whole idea on this page: how the chance of ending up with less than you started with falls as the holding period gets longer. It's probably the most repeated argument in investing, and it's repeated because the underlying numbers do support it. They just don't support it quite as cleanly as the way it's usually put.
The figures are rolling windows, which just means every possible starting point in the record measured forward and then counted up. About 73% of one year periods finished positive, 88% of five year periods, 94% of ten year periods, and every twenty year period in the record finished positive. That last one gets quoted constantly, almost always without the qualifications it needs, and that's most of the reason I built the page.
So you'll find as much space here given to what's wrong with the 100% as to the 100% itself. It's before inflation, before fees and taxes, and it rests on far fewer genuinely independent observations than the number of windows makes it look. Two sources at the bottom, one of them secondary, which I've flagged where it matters rather than tucked away in small print.
Across rolling windows since 1928, the S&P 500 finished positive in about 73% of one year periods, 88% of five year periods, 94% of ten year periods and 100% of twenty year periods. No twenty year window in the record has produced a nominal loss on a total return basis. That last figure is the one most often quoted and the one that needs the most care: it is nominal, it excludes fees and taxes, and it rests on a small number of genuinely independent observations.
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