The current market downturn has led some investors to question their tolerance for taking on the risk accompanies investing in stocks. Volatility and downturns are inevitable, but the good news is that there are far more positive years than negative ones.
The chart below looks at annual US stock market returns from 1926 through 2021. With almost 100 years of history, returns have been positive in about 3 out of every 4 years.
Reaping the benefits of the stock market requires being a long-term investor. It can be challenging to stick to an established financial plan during a downturn, but it's the most effective strategy to capture a future recovery.
Distribution of US Market Returns, CRSP 1-10 Index Returns by Year, 1926-2021