S&P 500: 60 Years of Monthly and Daily Percentage Price Changes

These two charts present the monthly and daily percentage price changes in the S&P 500 from January 1950 through the most recent period in 2009, roughly 60 years.

After the exceptional experiences of the past year, a long-term look back may be helpful. Of course, we are in a different environment than the U.S. has seen since 1950, and the U.S. economy has been and is in continual change. But an awareness of history is still a good thing to have.

Monthly Price Change (click image to enlarge)

If you take the 80% of months in the middle, the extremes of monthly change were -4.40% and +5.35%.

If you take the 90% of months in the middle, the extremes of monthly change were -6.20% and +7.13%.

Daily Price Change

If you take the 80% of days in the middle, the extremes of daily change were -0.98% and +1.01%.

If you take the 90% of days in the middle, the extremes of daily change were -1.42% and +1.44%.

Neither of these charts provides data about back-to-back runs of monthly increases or declines.

Different investors will make different use of this sort of information, but we wanted to put it out there for those who may find it useful or insightful. It's good to have a sense of "the thing."

Investors often write to us for long-term data such as this. Then again, some will say "so what," and that's OK too. We think that in some way, at some time, it would be helpful to have these statistics available.

Disclosure: We own SPY in some managed accounts.

Comments

[Peter Mycro...:]

Nice Article;

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Oct 22 03:31 AM

[Old Trader:]

I'd agree with Mr. Shaw that having such data available is useful to all investors, regardless of their investment horizon. Its way too easy to get caught up in the market's "noise" and lose sight of the bigger picture (note: day traders are exempt from this caveat).

Oct 22 10:10 AM

[Moto:]

I guess we're supposed to stay in for the long term so we get those 8 or 9 or 10 per cent average annual returns. I've sat across the desk from too many people who take on more risk than they can stomach or afford. You can talk about the 80 or 90 percent but its WHEN the other 10 or 20 percent happen in your retirement planning. I guess if I cross a river full of crocodiles and only get eaten 10 per cent of the time I will be OK.


On Oct 22 10:10 AM Old Trader wrote:

> I'd agree with Mr. Shaw that having such data available is useful
> to all investors, regardless of their investment horizon. Its way
> too easy to get caught up in the market's "noise" and lose sight
> of the bigger picture (note: day traders are exempt from this caveat).

Oct 22 01:31 PM

[Old Trader:]

LOL @ moto's croc comment..

moto..."buy and hold" does NOT mean the same as "buy and forget". I suspect the vast category of those who got "chewed up" over the last 12-18 months fell into the latter category.


On Oct 22 01:31 PM Moto wrote:

> I guess we're supposed to stay in for the long term so we get those
> 8 or 9 or 10 per cent average annual returns. I've sat across the
> desk from too many people who take on more risk than they can stomach
> or afford. You can talk about the 80 or 90 percent but its WHEN the
> other 10 or 20 percent happen in your retirement planning. I guess
> if I cross a river full of crocodiles and only get eaten 10 per cent
> of the time I will be OK.

Oct 22 05:51 PM

[User 411091:]

Would not a useful re-ordering of this data - in helping to either question or explain the markets today - be found in seeing the level of the "percentage price changes" in monthly and daily form, in charts that plot those percentages (as averages maybe) along a "time" axis that shows how it has changed (representing volatility maybe?) and how today's patterns (of volatility?) compare to historical patterns?

Oct 22 09:13 PM

[Richard Shaw:]

USER411091: Yes there are other useful displays and ordering of the data. Here is one alternate approach that will be more familiar to those interested in statistics and volatility expressed as standard deviations:
www.qvmgroup.com/inves...

Oct 22 09:24 PM

[Richard Shaw:]

Old Trader:

Well said! ["buy and hold" does NOT mean the same as "buy and forget"]

Oct 22 10:19 PM