Stocks and Holding Periods
See how longer holding periods reduce the range of best and worst returns on stocks.
The best annual rate of return for all 1 year periods (trailing returns by month) in the S&P/TSX Total Return Index since 1948 was 86.9%
while the worst was minus 39.2%. By extending the holding period to 30 years, the range of best and worst returns narrowed to 12.7% for
best and plus 7.1% for worst.
The charts below show the 1 month, 1, 3, 5, 10, 15, 20, 25 and 30 year trailing returns for the S&P/TSX Total Return Index for the 75 year period from 1948 to 2022. As the holding period gets longer, the returns become consistently more positive. The number of negative return periods drops off dramatically after 3 years (see table below). For example, there are only 15 negative holding periods for 5 year periods and none for the 10, 15, 20, 25 and 30 year periods.
Best and Worst Annualized Returns
S&P/TSX Total Return Index
(Jan 1948 to Dec 2022)
Source: Toronto Stock Exchange
S&P/TSX Total Return Index
(Jan 1948 to Dec 2022)
Source: Toronto Stock Exchange
The charts below show the 1 month, 1, 3, 5, 10, 15, 20, 25 and 30 year trailing returns for the S&P/TSX Total Return Index for the 75 year period from 1948 to 2022. As the holding period gets longer, the returns become consistently more positive. The number of negative return periods drops off dramatically after 3 years (see table below). For example, there are only 15 negative holding periods for 5 year periods and none for the 10, 15, 20, 25 and 30 year periods.
| Number of Periods With: | ||||
|
Holding Period |
Positive Returns |
Negative Returns |
||
| 1 mo. | (900 periods) Jan 01-31, 1948, Feb 1-28, 1948 … Dec 1 - 31, 2022 | 561 | 339 | |
| 1 yr | (888 periods) Jan 48 - Jan 48, Feb 48 - Feb 49 … Dec 21 - Dec 22 | 662 | 226 | |
| 3 yrs | (864 periods) Jan 48 - Jan 51, Feb 48 - Feb 51 … Dec 19 - Dec 22 | 785 | 79 | |
| 5 yrs | (840 periods) Jan 48 - Jan 53, Feb 48 - Feb 53 … Dec 17 - Dec 22 | 825 | 15 | |
| 10 yrs | (780 periods) Jan 48 - Jan 58, Feb 48 - Feb 58 … Dec 12 - Dec 22 | 780 | 0 | |
| 15 yrs | (720 periods) Jan 48 - Jan 63, Feb 48 - Feb 63 … Dec 07 - Dec 22 | 720 | 0 | |
| 20 yrs | (660 periods) Jan 48 - Jan 68, Feb 48 - Feb 68 … Dec 02 - Dec 22 | 660 | 0 | |
| 25 yrs | (600 periods) Jan 48 - Jan 73, Feb 48 - Feb 73 … Dec 97 - Dec 22 | 600 | 0 | |
| 30 yrs | (540 periods) Jan 48 - Jan 78, Feb 48 - Feb 78 … Dec 92 - Dec 22 | 540 | 0 | |
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Assumptions
Returns for all periods are measured using the closing month end values of the S&P/TSX Total Return Index from January 1948 to December 2022. The annual return is the annualized compound rate of return.
Disclaimer
Returns for all periods are measured using the closing month end values of the S&P/TSX Total Return Index from January 1948 to December 2022. The annual return is the annualized compound rate of return.
Disclaimer
