This month, our selection highlights the probabilities of having a positive return over a given time period. Our chart focuses on the US stock market over a period of 30 years.
If you’re the type of person who looks at your portfolio daily over a cup of coffee, you’ll likely be disappointed. That’s because only 54% of days are positive, meaning on a day-to-day basis, half of the days are negative.
However, if you look at your portfolio monthly, there’s an improvement. The probability of having a positive month increases to almost 65%.
And on an annual basis, that rises to 83%, meaning out of every ten years, only two years will be negative, while eight should be positive.
So, the more often you look at your portfolio fluctuating over a short period, the more likely it is that you’ll be disappointed and draw false conclusions.
The Key Takeaway?
Daily and monthly fluctuations are not indicative of long-term performance. On behalf of TWM Group, thank you for watching our Chart of the Month. See you next time.