Over short time periods, an S&P 500 Index fund can deliver exceptionally high returns, or exceptionally low returns, depending on the time period you were invested. The chart above looks at the 1, 3, 5, 10, 15 and 20 year rolling index returns of the S&P 500 Index over the time period of January 1973 – April 2009.
The worst one year rolling time frame delivered a return of -43%. This occurred over the twelve months ending in February 2009. The best one year index return delivered a 61% return, which occurred over the twelve months ending in June 1983.
If you were a long term investor, the worst twenty years delivered a return of 7% a year. This occurred over the twenty years ending in February 2009. The best twenty years delivered an average return of 18% a year, which occurred over the twenty years ending in March 2000.
The next chart in the series compares the S&P 500 Index rolling returns to other stock and bond index returns, such as the Russell 2000 Index, the Barclays Capital US Government Intermediate Term Bond Index, the Barclays Corporate Intermediate Term Bond Index, and a Long Term Government Bond Index.