21 Years of investing

[JTH]

Happy Sunday

Please feel free to comment, all perspectives are welcome

Looking at the 21-year average, we can see the longer you stay in, the greater your chance for success. The 1-day average win ratio is 54% while it climbs to 74% on a rolling 12-month chart.



____________________
Looking at the chart below, I must admit I was a bit surprised and at the same time disappointed. Back in 2001, I remember old timers telling me to just invest $100 a month and "Don't look at it." Over these past 21 years, if you wanted to be a millionaire, you would have needed to invest $1,250 monthly. This data doesn't consider the expense ratio of many of the mutual funds that were offered at the time.

Time is your friend:

$100 a month over 21 years, $25,200 invested earns $80,972, for a 321.23% return.
$100 a month over 42 years, $50,400 invested earns $521,128 for a 1033.98% return.




________________________
Finally we have our beloved inflation chart, the total average is 2.19% I'm not sure if I believe that. Inflation is the real thief, if we lost an average 2.19% inflation over the past 21 years, did we lose 46% of our value or do we have less earning power?

LINK: "According to the U.S. Bureau of Labor Statistics, prices for carbonated drinks were 48.23% higher in 2021 versus 2001 (a $9.65 difference in value)."

 

[JTH]

Happy Sunday

Here are some observations from the previous 21 years for the S&P 500 Index.

From the 5285 trading sessions, the baseline win ratio is 54% (bottom right corner in pic).

66% closed above the 50 SMA.
69% closed above the 100 SMA.
72% closed above the 200 SMA.
76% closed above the 500 SMA.

Across these trading sessions,

- We can see that when the index is trading below the moving averages, the win ratio falls into the 40s.
- What is also interesting is that both the average gains & losses were significantly higher than the 21-year daily average. Perhaps this implies that when the index falls below these moving averages that volatility increases.

- Conversely, when the index is above the moving averages, the win ratio increases but also the average gains & losses decreases below the 21-year daily averages. This might imply we now have stability, but with this comes slower gains & loses.

 

[JTH]

In light of today's volatile pre-market conditions, I'm posting this chart early instead of waiting till Sunday.

21 years of stats show the stronger the gap, the stronger the probability of the gap having closed in the direction it opened from the previous day's close.

 

[JTH]

With 2022 in the books, I've updated the baseline statistics for the previous 21 years (1, 3 day) and 63 years (1-12 Months). These monthly stats go back to 1960 which was a bad year, and no thanks to 2022, we now have bad stats on both the back and front end. Either ways, when trying to estimate future potential gains, these stats can give us a realistic long-term perspective .

 

[JTH]

This is what the 3-day performance looks like, pegged to the trading day of the month, across the previous 21 years.

I've highlighted days above and below a 57% win ratio. A 57% win ratio (far right column) is the win ratio for all 3-days periods over 21 years. Across this chart, we can see that historically the performance is better towards the beginning & end of the month, with a nice hump in the middle.

 

[JTH]

Over the previous 21 years, the Day of Week historical statistics are in a dead heat. The most profitable day is Tuesday with a .07% average, while the least profitable is Monday with a -.01% average return.