The rewarding distribution of Australian stock market returns

Annual stock market returns are unpredictable, but “up” years have occurred much more frequently than “down” years in Australia. This may be reassuring to investors, especially if they find the current market conditions unsettling. 

In AUD. S&P/ASX data copyright 2022 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.

• The Australian stock market posted positive returns in 74% of the calendar years from 1980 through 2021.

• The market gained an annualised average of 11.1% during this period. Yet nearly two-thirds of yearly observations were at least 10 percentage points above or below the average.

• Another noteworthy trend: More than 90% of the down years were followed by up years. The most recent example: a 3.1% loss in 2018 followed by a 23.8% gain in 2019.

• The stock market tends to reward investors who can weather annual ups and downs and stay committed to a long-term plan.