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  • Michael Livian, CFA

Investing for the Long-Term: Here is Why

Investors are frequently reminded that they should only invest “long-term”. The natural question that arises is: why? If you, like us, believe in data and evidence, here’s your answer.

Look at the post-World War II (in our opinion the correct time frame to analyze long-term market data) annualized 10-year rolling rates of return of the S&P500 Index and you’ll notice the following:

  • Of the 64 readings only 7 were negative. Nearly 90% of the annualized rates of returns were positive.

  • The worst return was registered between 1998 and 2008 (following the dotcom bubble) and was -3% per year.​​​

Source: data from (dofollow) and Livian & Co.

Smart investors know that there are no market certainties and wisely use probabilities to improve their chances of success. A 90% chance of a 10-year positive return from the stock market makes a pretty compelling case for long-term investing!

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