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 1947 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.

Best and Worst Annualized Returns
S&P/TSX Total Return Index
(Jan 1947 to Dec 2021)
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 1947 to 2021. 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, 1947, Feb 1-28, 1947 … Dec 1 - 31, 2021 562 338
1 yr (888 periods) Jan 47 - Jan 48, Feb 47 - Feb 48 … Dec 20 - Dec 21 667 221
3 yrs (864 periods) Jan 47 - Jan 50, Feb 47 - Feb 50 … Dec 18 - Dec 21 785 79
5 yrs (840 periods) Jan 47 - Jan 52, Feb 47 - Feb 52 … Dec 16 - Dec 21 825 15
10 yrs (780 periods) Jan 47 - Jan 57, Feb 47 - Feb 57 … Dec 11 - Dec 21 780 0
15 yrs (720 periods) Jan 47 - Jan 62, Feb 47 - Feb 62 … Dec 06 - Dec 21 720 0
20 yrs (660 periods) Jan 47 - Jan 67, Feb 47 - Feb 67 … Dec 01 - Dec 21 660 0
25 yrs (600 periods) Jan 47 - Jan 72, Feb 47 - Feb 72 … Dec 96 - Dec 21 600 0
30 yrs (540 periods) Jan 47 - Jan 77, Feb 47 - Feb 77 … Dec 91 - Dec 21 540 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 1947 to December 2021. The annual return is the annualized compound rate of return.

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