Visual aids are helpful in the investing world. A well-done chart or table can compress a lot of data into a relatively simple, easy-to-grasp form.
Many financial firms and advisors regularly issue collections of helpful graphics, such as Creative Planning's Week in Charts, J.P. Morgan's monthly Guide to the Markets, and First Trust Advisors' quarterly Markets in Perspective.
With the third quarter of the year ending this week, First Trust has updated several of its best charts with data through 9/30/2024. Given current crises and events, this one seems especially timely, reminding us that come what may, the market has a history of digesting difficulty and marching upward.
Data from 12/31/1969 - 9/30/2024. Click image to enlarge.
Next is the latest iteration of the company's popular "bull and bear" chart. This graphic shows that 1) bull markets have historically lasted longer than bear markets, and 2) bulls have added more value than bears have taken away.
Daily returns from 4/29/1942 - 9/30/2024. Click image to enlarge.
Yes, there are bad years. However, as the detailed scorecard below shows, they are far outweighed by the good ones.
Data sources: Ibbotson Associates, Bloomberg. Click image to enlarge.
Of course, even in winning years, the path is never straight upward. The following graphic contrasts the market's deepest drawdown each calendar year with its eventual full-year performance.
2024 performance is as of 9/30/24. Click image to enlarge.
The lessons of history
While past performance doesn't guarantee future results, these historical performance charts are instructive. They help you "see" why the best approach to achieving long-term investing success is to "keep calm and carry on" with your investing plan, even when the world seems to be in turmoil.
