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 1949 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 1949 to 2023. 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 1949 to Dec 2023)
Source: Toronto Stock Exchange
S&P/TSX Total Return Index
(Jan 1949 to Dec 2023)
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 1949 to 2023. 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, 1949, Feb 1-28, 1949 … Dec 1 - 31, 2023 | 560 | 340 | |
| 1 yr | (888 periods) Jan 49 - Jan 50, Feb 49 - Feb 50 … Dec 22 - Dec 23 | 662 | 226 | |
| 3 yrs | (864 periods) Jan 49 - Jan 52, Feb 49 - Feb 52 … Dec 20 - Dec 23 | 785 | 79 | |
| 5 yrs | (840 periods) Jan 49 - Jan 54, Feb 49 - Feb 54 … Dec 18 - Dec 23 | 825 | 15 | |
| 10 yrs | (780 periods) Jan 49 - Jan 59, Feb 49 - Feb 59 … Dec 13 - Dec 23 | 780 | 0 | |
| 15 yrs | (720 periods) Jan 49 - Jan 64, Feb 49 - Feb 64 … Dec 08 - Dec 23 | 720 | 0 | |
| 20 yrs | (660 periods) Jan 49 - Jan 69, Feb 49 - Feb 69 … Dec 03 - Dec 23 | 660 | 0 | |
| 25 yrs | (600 periods) Jan 49 - Jan 74, Feb 49 - Feb 74 … Dec 98 - Dec 23 | 600 | 0 | |
| 30 yrs | (540 periods) Jan 49 - Jan 79, Feb 49 - Feb 79 … Dec 93 - Dec 23 | 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 1949 to December 2023. 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 1949 to December 2023. The annual return is the annualized compound rate of return.
Disclaimer
