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100 years of S&P 500 data points to holding through downturns
The S&P 500 fell 57% in 2007 to 2009, but a $1,000 investment at the March 9, 2009 low would be worth about $16,000 today after reinvesting dividends, according to historical analysis.
A historical review of the S&P 500 and its predecessor suggests investors may be better served by staying invested during recessions rather than trying to time market lows, according to analysis published by Yahoo Finance.
The review notes that the index traces back to Standard and Poor’s “Composite Index” of 90 companies in 1926, which later became the S&P 500 when the top 500 constituents were defined in 1957.
Over the past century that included 15 recessions, the article says the combined index and its successor have generated average annual total returns of about 10% and highlights drawdowns during the Great Recession, the COVID-19 downturn, and the 2022 to 2023 rate hike cycle.
It cites that the S&P 500 dropped 57% from October 2007 to March 2009, and that a $1,000 investment made at the March 9, 2009 low would be worth about $16,000 today assuming reinvested dividends, while the index also declined 34% in early 2020 and 25% from January 2022 to October 2022.
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