{"id":279594,"date":"2025-10-05T13:39:27","date_gmt":"2025-10-05T13:39:27","guid":{"rendered":"https:\/\/www.europesays.com\/us\/279594\/"},"modified":"2025-10-05T13:39:27","modified_gmt":"2025-10-05T13:39:27","slug":"2-market-crash-facts-that-surprised-me-%f0%9f%93%89","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/279594\/","title":{"rendered":"2 market-crash facts that surprised me \ud83d\udcc9"},"content":{"rendered":"

\ud83d\udcc8The stock market rallied to all-time highs<\/strong>, with the S&P 500 setting an intraday high of 6,750.87 and a closing high of 6,715.79 on Friday. The index is now up 14.2% year-to-date. For more on the market, read: The stock market and the economy are diverging<\/a><\/strong> \ud83d\udcca<\/strong><\/p>\n

–<\/p>\n

When I first got into stock market history about 20 years ago, I recall being regularly surprised by facts and stats that I wouldn\u2019t have assumed.<\/p>\n

Two of them related to history\u2019s biggest stock market crashes.<\/p>\n

The first was about Black Monday<\/a>, Oct. 19, 1987. In a single trading session, the Dow fell 508 points, which was a staggering 22.6% at the time. The S&P 500 plummeted 20.4%.<\/p>\n

\"\"<\/a>Despite the Black Monday crash, the S&P 500 ended 1987 positively. (Source: Yahoo Finance)<\/p>\n

That year, the S&P tumbled 33.5% from its Aug. 25 high to its Dec. 4 low.<\/p>\n

The surprising fact<\/strong>: The market was actually positive for the year, with the S&P gaining 2%. The economy didn\u2019t go into recession<\/a> either.<\/p>\n

The second surprise was about the dot-com bubble<\/a>. From the peak of the internet stock frenzy on March 24, 2000, to its low on Oct. 9, 2002, the S&P 500 fell a breathtaking 49%.<\/p>\n

\"\"<\/a>The dot-com bubble inflated significantly after Fed Chair Alan Greenspan\u2019s comments. (Source: Yahoo Finance)<\/p>\n

One of the more notable events during the run-up in prices was when then Fed Chair Alan Greenspan famously asked<\/a> (emphasis added):<\/p>\n

\n

But how do we know when irrational exuberance<\/strong> has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?<\/p>\n<\/blockquote>\n

Looking back, many point to that speech as a prescient warning of the bubble that eventually burst.<\/p>\n

The surprising fact<\/strong>: The S&P was at 749 when Greenspan gave that speech on Dec. 5, 1996. After the dot-com bubble burst, the index bottomed in 2002 at 776. The S&P at the post-bubble low was actually higher than where it was when Greenspan gave his speech.*<\/p>\n

Maybe we are on the precipice of a deep and lengthy market downturn.<\/p>\n

Or maybe the rally extends further, so much so that the bottom of the next sell-off ends up being higher than where we are today.<\/p>\n

Investing in the stock market can be an unpleasant process<\/a>. Conservative strategies like buying and holding<\/a> or dollar-cost averaging<\/a> into the market are already tough enough.<\/p>\n

Trading in and out of the market is an even bigger challenge.<\/p>\n

Looking back at past stock market crashes reminds us that timing the market can be a treacherous, money-losing exercise because stocks are anything but predictable in the near-term.<\/p>\n

Even when the market appears overpriced<\/a>, the risk is that you end up selling low and buying back in at a high.<\/p>\n

\u201cThe hard part about timing the market is you\u2019ve got to be right twice,\u201d Charles Schwab CEO Rick Wurster said on Yahoo Finance<\/a>. \u201cYou\u2019ve got to get out at the right time, and then you\u2019ve got to be able to get back in at the right time, and that\u2019s very hard to do.\u201d<\/p>\n

Last year, BofA\u2019s Savita Subramanian reviewed the history and found<\/a> that the margin of error for profitably trading market tops is very thin. More about that here<\/a>.<\/p>\n

As always, the market tends to reward investors who can put in the time<\/a>.<\/p>\n

\u201cIt\u2019s about time in the market, as opposed to timing the market,\u201d Wurster said<\/a>.<\/p>\n

–<\/p>\n

*Seven years later, the S&P fell below that 776 low, bottoming at 666 in March 2009. This came after the housing bubble burst, triggering the global financial crisis. Not all bubbles and market crashes are the same.<\/p>\n

Related from TKer:<\/p>\n

There were several notable data points and macroeconomic developments since our last review<\/a>:<\/p>\n

\ud83d\udea8Due to the government shutdown<\/a>, we did not get reports on August construction spending, August factory orders, September job creation and unemployment, and weekly initial jobless claims. Until the government reopens, we\u2019ll be leaning more on private sources of data.<\/strong><\/p>\n

\ud83d\udc4e Private jobs decline<\/strong>. According to payroll processor ADP, which tracks private payrolls and employs a different methodology than the BLS, private companies shed 32,000 jobs in September. Declines in small and mid-sized businesses more than offset job gains in large businesses.<\/p>\n

From ADP\u2019s Nela Richardson<\/a>: \u201cDespite the strong economic growth we saw in the second quarter, this month\u2019s release further validates what we\u2019ve been seeing in the labor market, that U.S. employers have been cautious with hiring.\u201c<\/p>\n

For more on the labor market, read: The labor market is cooling<\/a><\/strong> \ud83d\udcbc<\/p>\n

\ud83d\udc4e Hiring intentions fall<\/strong>. According to outplacement firm Challenger, Gray & Christmas<\/a>, companies last month announced plans to add 117,313 jobs, the weakest September since 2011. Year to date, companies announced plans to add 204,939 jobs, the lowest tally since 2009.<\/p>\n

From Challenger\u2019s Andy Challenger<\/a>: \u201cRight now, we\u2019re dealing with a stagnating labor market, cost increases, and a transformative new technology. With rate cuts on the way, we may see some stabilizing in the job market in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring.\u201c<\/p>\n

For more on why hiring intentions matter, read: The hiring situation<\/a><\/strong> \ud83e\udde9<\/p>\n

\ud83d\udcb0 Job switchers still get better pay<\/strong>. According to ADP<\/a>, annual pay in September for people who changed jobs was up 7.6% from a year ago. For those who stayed at their job, pay was up 4.5%.<\/p>\n

For more on why policymakers are watching wage growth, read: Revisiting the key chart to watch amid the Fed\u2019s war on inflation<\/a><\/strong> \ud83d\udcc8<\/p>\n

\ud83d\udcbc Job openings tick higher<\/strong>. According to the BLS\u2019s Job Openings and Labor Turnover Survey<\/a>, employers had 7.23 million job openings in August, up from 7.21 million in July.<\/p>\n

\"\"<\/a>(Source: BLS via FRED<\/a>)<\/p>\n

During the month, there were 7.38 million unemployed people \u2014 meaning there were 0.98 job openings per unemployed person. This continues to be one of the more obvious signs of excess demand for labor<\/a>. However, this metric has returned to prepandemic levels.<\/p>\n

\"\"<\/a>(Source: BLS via FRED<\/a>)<\/p>\n

For more on job openings, read: Were there really twice as many job openings as unemployed people?<\/a><\/strong> \ud83e\udd28 and Revisiting the key chart to watch amid the Fed\u2019s war on inflation<\/a><\/strong> \ud83d\udcc8<\/p>\n

\ud83d\udc4d Layoffs remain depressed, hiring remains firm<\/strong>. Employers laid off 1.73 million people in August. While challenging for the people affected, this figure represents just 1.1% of total employment. This metric remains slightly below prepandemic levels.<\/p>\n

\"\"<\/a>(Source: BLS via FRED<\/a>)<\/p>\n

For more on layoffs, read: Every macro layoffs discussion should start with this key metric<\/a><\/strong> \ud83d\udcca<\/p>\n

Hiring activity continues to be much higher than layoff activity. During the month, employers hired 5.13 million people.<\/p>\n

\"\"<\/a>(Source: BLS via FRED<\/a>)<\/p>\n

That said, the hiring rate \u2014 the number of hires as a percentage of the employed workforce \u2014 has been trending lower, which could be a sign of trouble to come<\/a> in the labor market.<\/p>\n

\"\"<\/a>(Source: BLS via FRED<\/a>)<\/p>\n

For more on why this metric matters, read: The hiring situation<\/a><\/strong> \ud83e\udde9<\/p>\n

\ud83e\udd14 People are quitting less<\/strong>. In August, 3.09 million workers quit their jobs. This represents 1.9% of the workforce. The rate continues to trend below prepandemic levels.<\/p>\n

\"\"<\/a>(Source: BLS via FRED<\/a>)<\/p>\n

A low quits rate could mean a number of things: more people are satisfied with their job, workers have fewer outside job opportunities, wage growth is cooling, or productivity will improve as fewer people are entering new, unfamiliar roles.<\/p>\n

For more, read: Promising signs for productivity<\/a><\/strong> \u2699\ufe0f<\/p>\n

\ud83d\udc4e Consumer confidence ticks lower<\/strong>. The Conference Board\u2019s Consumer Confidence Index<\/a> ticked 3.6 points lower in September. From the firm\u2019s Stephanie Guichard: \u201cThe present situation component registered its largest drop in a year. Consumers\u2019 assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low. This is consistent with the decline in job openings. Expectations also weakened in September, but to a lesser extent. Consumers were a bit more pessimistic about future job availability and future business conditions but optimism about future income increased, mitigating the overall decline in the Expectations Index.\u201d<\/p>\n

Relatively weak consumer sentiment readings appear to contradict relatively strong consumer spending data. For more on this contradiction, read: What consumers do > what consumers say<\/a><\/strong> \ud83d\ude4a and We\u2019re taking that vacation whether we like it or not<\/a><\/strong> \ud83d\udeeb<\/p>\n

\ud83d\udc4e Consumers feel worse about the labor market<\/strong>. From The Conference Board\u2019s September Consumer Confidence survey<\/a>: \u201cConsumers\u2019 views of the labor market cooled further in September. 26.9% of consumers said jobs were \u2018plentiful,\u2019 down from 30.2% in August. 19.1% of consumers said jobs were \u2018hard to get,\u2019 unchanged from last month.\u201c<\/p>\n

Many economists monitor the spread between these two percentages (a.k.a., the labor market differential), and it has been reflecting a cooling labor market.<\/p>\n

From Wells Fargo<\/a>: \u201cThe trend decline here mirrors the gradual loss of momentum in the labor market over the past couple of years. \u2026 The fact that expectations are coming down is part of the recipe for the sort of developments the FOMC will need to see in order to deliver on further rate cuts. Ultimately, the combination of lower rates and a more stimulative fiscal policy environment in 2026 should put the consumer on somewhat less wobbly fundamentals at the start of next year.\u201c<\/p>\n

For more on the labor market, read: The labor market is cooling<\/a><\/strong> \ud83d\udcbc<\/p>\n

\ud83d\udcb3 Card spending data is holding up<\/strong>. From JPMorgan: \u201cAs of 25 Sep 2025, our Chase Consumer Card spending data (unadjusted) was 2.4% above the same day last year. Based on the Chase Consumer Card data through 25 Sep 2025, our estimate of the US Census September control measure of retail sales m\/m is 0.11%.\u201d<\/p>\n

\"\"<\/a>(Source: JPMorgan)<\/p>\n

From BofA: \u201cTotal card spending per HH was up 2.2% y\/y in the week ending Sep 27, according to BAC aggregated credit & debit card data. Y\/y electronics spending fell sharply, likely due to base effects from iPhone launch timing (9\/20\/24 vs. 9\/19\/25). Spending growth remains solid despite soft labor data.\u201c<\/p>\n

\"\"<\/a>(Source: BofA)<\/p>\n

For discussion on how sales may be inflated due to tariffs, read: A BIG economic question right now<\/a><\/strong> \ud83e\udd14<\/p>\n

\u26fd\ufe0f Gas prices hold steady<\/strong>. From AAA<\/a>: \u201cThe national average for a gallon of regular dropped five cents since last week to $3.15. Fall is officially here, bringing lower gas prices and winter-blend gasoline which is cheaper to produce. Pacific Northwest drivers are getting some relief now that a pipeline issue has been resolved and pump prices are trending downward. The Atlantic hurricane season is halfway over, but the tropics remain a concern for the next two months if there\u2019s storm activity in the Gulf that affects refineries in the area.\u201d<\/p>\n

For more on energy prices, read: Higher oil prices meant something different in the past<\/a><\/strong> \ud83d\udee2\ufe0f<\/p>\n

\ud83c\udfe0 Mortgage rates tick higher<\/strong>. According to Freddie Mac<\/a>, the average 30-year fixed-rate mortgage rose to 6.34%, up from 6.30% last week: \u201cThe 30-year fixed-rate mortgage increased again this week but remains below its 52-week average of 6.71%. The last few months have brought lower rates and as indicated by the recently reported increase in pending home sales, homebuyers are feeling more confident to get into the market.\u201d<\/p>\n

There are 147.9 million housing units<\/a> in the U.S., of which 86.1 million are owner-occupied<\/a> and about 39%<\/a> are mortgage-free<\/a>. Of those carrying mortgage debt, almost all have fixed-rate mortgages<\/a>, and most of those mortgages have rates that were locked in<\/a> before rates surged from 2021 lows. All of this is to say: Most homeowners are not particularly sensitive to the small weekly movements in home prices or mortgage rates.<\/p>\n

For more on mortgages and home prices, read: Why home prices and rents are creating all sorts of confusion about inflation<\/a><\/strong> \ud83d\ude16<\/p>\n

\ud83c\udfe0 Home prices cool<\/strong>. According to the S&P CoreLogic Case-Shiller index<\/a>, home prices were up 1.7% year-over-year in July but declined 0.1% month-over-month. From S&P Dow Jones Indices\u2019 Nicholas Godec: \u201cLooking ahead, the housing market appears to be settling into a new, more measured equilibrium. \u201cThe era of 15-20% annual home price jumps is behind us, and in its place we\u2019re seeing growth rates closer to overall inflation \u2013 or even a bit below it. While that means homeowners aren\u2019t gaining wealth at the breakneck pace of the recent past, it also signals a potentially healthier trajectory for housing in the long run.\u201d<\/p>\n

\ud83e\udd37\ud83c\udffb\u200d\u2642\ufe0f Manufacturing activity surveys were mixed<\/strong>. From S&P Global\u2019s September U.S. Manufacturing PMI<\/a>: \u201cUS manufacturing production rose for a fourth successive month in September, but the upturn lost momentum as companies reported a drop in order book growth alongside a buildup of unsold finished goods inventories. Despite a slowing in demand growth, many factories produced more goods, using up raw materials that had been stockpiled ahead of tariff implementation. This poses a downside risk to future production in the absence of a pickup in demand, though also hints at some alleviation of price pressures: There is already evidence of companies offering excess stock to customers at reduced rates.\u201d<\/p>\n

The ISM\u2019s September Manufacturing PMI<\/a> suggests the sector is in contraction. But the pace of contraction has improved from the prior month.<\/p>\n

\ud83d\udc4e Services activity surveys were mixed<\/strong>. From S&P Global\u2019s September U.S. Services PMI<\/a>: \u201cService sector growth softened slightly in September but remained strong enough to round off an impressive performance over the third quarter a whole. Combined with sustained growth in the manufacturing sector, the expansion of service sector activity is indicative of robust third quarter annualized GDP growth of around 2.5%.<\/p>\n

The ISM\u2019s September Services PMI<\/a> also signaled cooling in the sector.<\/p>\n

Keep in mind that during times of perceived stress, soft survey data tends to be more exaggerated than actual hard data.<\/p>\n

For more on this, read: What businesses do > what businesses say<\/a><\/strong> \ud83d\ude4a<\/p>\n

\ud83c\udfe2 Offices remain relatively empty<\/strong>. From Kastle Systems<\/a>: \u201cPeak day office occupancy was 62.9% on Wednesday last week, less than one tenth of a point higher than occupancy on Tuesday and two and a half points lower than the previous week, as workers across the country stayed home in observance of Rosh Hashanah. Average occupancy was down every day of the week except Thursday. The average low was on Friday at 33.1%, also down two and a half points from last week.\u201d<\/p>\n

For more on office occupancy, read: This stat about offices reminds us things are far from normal<\/a><\/strong> \ud83c\udfe2<\/p>\n

\ud83d\udcc8 Near-term GDP growth estimates are tracking positively<\/strong>. The Atlanta Fed\u2019s GDPNow model<\/a> sees real GDP growth rising at a 3.8% rate in Q3.<\/p>\n

For more on GDP and the economy, read: 9 once-hot economic charts that cooled<\/a><\/strong> \ud83d\udcc9 and We\u2019re at an economic tipping point<\/a><\/strong> \u2696\ufe0f<\/p>\n

\ud83d\udea8 The Trump administration\u2019s pursuit of tariffs<\/a> is disrupting global trade, with significant implications for the U.S. economy, corporate earnings, and the stock market. Until we get more clarity<\/a>, here\u2019s where things stand:<\/p>\n

Earnings look bullish<\/strong>: The long-term outlook for the stock market remains favorable, bolstered by expectations for years of earnings growth<\/a>. And earnings are the most important driver of stock prices<\/a>.<\/p>\n

Demand is positive<\/strong>: Demand for goods and services remains positive<\/a>, supported by healthy consumer and business balance sheets<\/a>. Job creation, although cooling<\/a>, also remains positive<\/a>, and the Federal Reserve \u2014 having resolved the inflation crisis<\/a> \u2014 shifted its focus toward supporting the labor market<\/a>.<\/p>\n

But growth is cooling<\/strong>: While the economy remains healthy, growth has normalized<\/a> from much hotter levels earlier in the cycle. The economy is less \u201ccoiled\u201d<\/a> these days as major tailwinds like excess job openings<\/a> and core capex orders<\/a> have faded. It has become harder to argue<\/a> that growth is destiny.<\/p>\n

Actions speak louder than words<\/strong>: We are in an odd period, given that the hard economic data decoupled from the soft sentiment-oriented data<\/a>. Consumer and business sentiment has been relatively poor, even as tangible consumer and business activity continues to grow and trend at record levels. From an investor\u2019s perspective, what matters<\/a> is that the hard economic data continues to hold up.<\/p>\n

Stocks are not the economy<\/strong>: There\u2019s a case to be made that the U.S. stock market could outperform the U.S. economy<\/a> in the near term, thanks largely to positive operating leverage<\/a>. Since the pandemic, companies have aggressively adjusted their cost structures. This came with strategic layoffs<\/a> and investment in new equipment<\/a>, including hardware powered by AI<\/a>. These moves are resulting in positive operating leverage<\/a>, which means a modest amount of sales growth \u2014 in the cooling economy \u2014 is translating to robust earnings growth<\/a>.<\/p>\n

Mind the ever-present risks<\/strong>: Of course, we should not get complacent. There will always be risks to worry about<\/a>, such as U.S. political uncertainty<\/a>, geopolitical turmoil<\/a>, energy price volatility<\/a>, and cyber attacks<\/a>. There are also the dreaded unknowns<\/a>. Any of these risks can flare up and spark short-term volatility in the markets.<\/p>\n

Investing is never a smooth ride<\/strong>: There\u2019s also the harsh reality that economic recessions<\/a> and bear markets<\/a> are developments that all long-term investors should expect<\/a> as they build wealth in the markets. Always keep your stock market seat belts fastened<\/a>.<\/p>\n

Think long-term<\/strong>: For now, there\u2019s no reason to believe there\u2019ll be a challenge that the economy and the markets won\u2019t be able to overcome<\/a> over time. The long game remains undefeated<\/a>, and it\u2019s a streak that long-term investors can expect to continue.<\/p>\n

For more on how the macro story is evolving, check out the previous review of the macro crosscurrents. \u00bb<\/a><\/strong><\/p>\n

Here\u2019s a roundup of some of TKer\u2019s most talked-about paid and free newsletters about the stock market. All of the headlines are hyperlinked to the archived pieces.<\/p>\n

The stock market can be an intimidating place: It\u2019s real money on the line, there\u2019s an overwhelming amount of information, and people have lost fortunes in it very quickly. But it\u2019s also a place where thoughtful investors have long accumulated a lot of wealth. The primary difference between those two outlooks is related to misconceptions about the stock market that can lead people to make poor investment decisions.<\/p>\n

Passive investing is a concept usually associated with buying and holding a fund that tracks an index. And no passive investment strategy has attracted as much attention as buying an S&P 500 index fund. However, the S&P 500 \u2014 an index of 500 of the largest U.S. companies \u2014 is anything but a static set of 500 stocks.<\/p>\n

\"\"<\/a>(Source: S&P Dow Jones indices via TKer<\/a>)<\/p>\n

For investors, anything you can ever learn about a company matters only if it also tells you something about earnings. That\u2019s because long-term moves in a stock can ultimately be explained by the underlying company\u2019s earnings, expectations for earnings, and uncertainty about those expectations for earnings. Over time, the relationship between stock prices and earnings has a very tight statistical relationship.<\/p>\n

\"\"<\/a>(Source: Fidelity via TKer<\/a>)<\/p>\n

Investors should always be mentally prepared for some big sell-offs in the stock market. It\u2019s part of the deal when you invest in an asset class that is sensitive to the constant flow of good and bad news. Since 1950, the S&P 500 has seen an average annual max drawdown (i.e., the biggest intra-year sell-off) of 14%.<\/p>\n

\"\"<\/a>(Source: JPMorgan)<\/p>\n

Every recession in history was different. And the range of stock performance around them varied greatly. There are two things worth noting. First, recessions have always been accompanied by a significant drawdown in stock prices. Second, the stock market bottomed and inflected upward long before recessions ended.<\/p>\n

\"\"<\/a>(Source: Goldman Sachs via TKer<\/a>)<\/p>\n

Since 1928, the S&P 500 generated a positive total return more than 89% of the time over all five-year periods. Those are pretty good odds. When you extend the timeframe to 20 years, you\u2019ll see that there\u2019s never been a period where the S&P 500 didn\u2019t generate a positive return.<\/p>\n

While a strong dollar may be great news for Americans vacationing abroad and U.S. businesses importing goods from overseas, it\u2019s a headwind for multinational U.S.-based corporations doing business in non-U.S. markets.<\/p>\n

\"\"<\/a>(Source: FactSet via TKer<\/a>)<\/p>\n

The stock market sorta reflects the economy. But also, not really. The S&P 500 is more about the manufacture and sale of goods. U.S. GDP is more about providing services.<\/p>\n

\"\"<\/a>(Source: BlackRock via TKer<\/a>)<\/p>\n

\n

\u2026you don’t want to buy them when earnings are great, because what are they doing when their earnings are great? They go out and expand capacity. Three or four years later, there’s overcapacity and they’re losing money. What about when they’re losing money? Well, then they\u2019ve stopped building capacity. So three or four years later, capacity will have shrunk and their profit margins will be way up. So, you always have to sort of imagine the world the way it’s going to be in 18 to 24 months as opposed to now. If you buy it now, you’re buying into every single fad every single moment. Whereas if you envision the future, you’re trying to imagine how that might be reflected differently in security prices.<\/p>\n<\/blockquote>\n

\n

Some event will come out of left field, and the market will go down, or the market will go up. Volatility will occur. Markets will continue to have these ups and downs. \u2026 Basic corporate profits have grown about 8% a year historically. So, corporate profits double about every nine years. The stock market ought to double about every nine years\u2026 The next 500 points, the next 600 points \u2014 I don\u2019t know which way they\u2019ll go\u2026 They\u2019ll double again in eight or nine years after that. Because profits go up 8% a year, and stocks will follow. That’s all there is to it.<\/p>\n<\/blockquote>\n

\n

Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac\u2019s talents didn\u2019t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, \u201cI can calculate the movement of the stars, but not the madness of men.\u201d If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.<\/p>\n<\/blockquote>\n

According to S&P Dow Jones Indices (SPDJI), 65% of U.S. large-cap equity fund managers underperformed the S&P 500 in 2024. As you stretch the time horizon, the numbers get even more dismal. Over a three-year period, 85% underperformed. Over a 10-year period, 90% underperformed. And over a 20-year period, 92% underperformed. This 2023 performance follows 14 consecutive years in which the majority of fund managers in this category have lagged the index.<\/p>\n

\"\"<\/a>(Source: SPDJI via TKer<\/a>)<\/p>\n

Even if you are a fund manager who generated industry-leading returns in one year, history says it\u2019s an almost insurmountable task to stay on top consistently in subsequent years. According to S&P Dow Jones Indices, just 4.21% of all U.S. equity funds in the top half of performance during the first year were able to remain in the top during the four subsequent years. Only 2.42% of U.S. large-cap funds remained in the top half<\/p>\n

SPDJI\u2019s report also considered fund performance relative to their benchmarks over the past three years. Of 738 U.S. large-cap equity funds tracked by SPDJI, 50.68% beat the S&P 500 in 2022. Just 5.08% beat the S&P in the two years ending 2023. And only 2.14% of the funds beat the index over the three years ending in 2024.<\/p>\n

\"\"<\/a> Very few funds consistently beat their benchmarks over extended periods. (Source: SPDJI via TKer<\/a>)<\/p>\n

Picking stocks in an attempt to beat market averages is an incredibly challenging and sometimes money-losing effort. Most professional stock pickers aren\u2019t able to do this consistently. One of the reasons for this is that most stocks don\u2019t deliver above-average returns. According to S&P Dow Jones Indices, only 19% of the stocks in the S&P 500 outperformed the average stock\u2019s return from 2001 to 2025. Over this period, the average return on an S&P 500 stock was 452%, while the median stock rose by just 59%.<\/p>\n

\"\"<\/a>(Source: SPDJI via TKer<\/a>)<\/p>\n","protected":false},"excerpt":{"rendered":"\ud83d\udcc8The stock market rallied to all-time highs, with the S&P 500 setting an intraday high of 6,750.87 and…\n","protected":false},"author":3,"featured_media":279595,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[64,135,67,132,68],"class_list":{"0":"post-279594","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-markets","10":"tag-united-states","11":"tag-unitedstates","12":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115321842675288817","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/279594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=279594"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/279594\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/279595"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=279594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=279594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=279594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}