Based on insights and data visualisation originally published by Visual Capitalist:
“152 Years of S&P 500 Returns (Pyramid)”
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What 152 Years of S&P 500 Returns Tell Us About Investing
At MBC Financial, we help clients make confident decisions by focusing on evidence, good planning, and a long-term view. One of the most useful reminders for investors comes from looking at over a century of market history: annual returns can vary dramatically year to year, but patterns emerge over time.
A Century and a Half of Market Performance
The S&P 500 (a widely used benchmark for large US companies) has delivered a wide range of annual outcomes across more than 150 years of data. Some years are exceptionally strong, others are sharply negative — and most fall somewhere in the middle.
- Positive years outnumber negative ones — historically, the index finishes higher in most calendar years.
- Most returns cluster in the middle — the most common outcomes tend to be modest-to-healthy gains rather than extremes.
- Large losses do happen — which is why risk planning matters as much as return-seeking.
When you group annual returns into “bands”, the pattern looks like a pyramid or bell curve: many years deliver moderate positive returns, while fewer years sit at the extremes (very high gains or steep losses).
Typical Return Bands (Illustrative)
The chart groups returns into ranges (for example: +10% to +20%, or -10% to 0%). A useful takeaway is that the middle bands are the most frequent, and extreme outcomes are rarer — but still important to plan for.
| Annual return range | What it means in plain English |
|---|---|
| Strongly positive years | Great years happen — often during strong growth phases — but they are not the norm every year. |
| Moderately positive years | Historically the most common “shape” of returns: steady growth rather than fireworks. |
| Flat to slightly positive years | Not every year feels exciting — but these years can still compound meaningfully over time. |
| Negative years | Down years are part of the journey. The key is preparing so you’re not forced to sell at the wrong time. |
Why This Matters for Investors
1) Time in the market tends to beat timing the market
Because positive years have historically been more common than negative ones, many investors are better served by a disciplined approach that stays invested, rather than trying to jump in and out based on headlines.
2) Diversification helps smooth the ride
Even broad markets can be volatile year to year. Diversifying across asset classes and geographies can reduce reliance on any single market outcome and help manage risk.
3) Planning for downturns is essential
Sharp declines happen — and the real risk often comes from what investors do during those periods. Having the right level of cash reserves, an appropriate risk profile, and a plan you can stick to can make all the difference.
4) Keep expectations realistic
History suggests that “ordinary” market years — not spectacular ones — do much of the heavy lifting over time through compounding. That’s useful when setting long-term assumptions for retirement planning and wealth building.
Putting It Into Practice With MBC Financial
The big lesson from long-term return history is not to predict next year — it’s to build a strategy that can cope with any year. At MBC Financial, we help clients align their investments with their goals, time horizon, and comfort with risk, while building plans designed to be resilient through market cycles.
Want to sense-check your current approach? If you’d like help translating market history into a practical plan, we’re happy to talk through your goals and options.
Important: This article is for general information only and does not constitute financial advice. Investments can go down as well as up, and you may get back less than you invest. Past performance is not a reliable indicator of future results. Consider seeking independent advice before making financial decisions.