One of our favorite graphics to explain the vagaries of annual stock market returns to beginners (and to remind all of the rest of us) is shown here:

We start with 1941. We believe that anything before that reflects something different. The SEC was founded in 1933 in response to the Roaring Twenties and Stock Market Crash of 1929. The Investment Company Act followed in 1941 — so we think the modern stock market was established at that point in time.

The graphic displays the results of individual years ranging from the “special” (unique and virtually unprecedented) performance we experienced in 2008 with its -37% total return … up to the returns witnessed in 1954 and 1958.

It’s helpful to remind and be reminded that the results of any given year can pretty much plop anywhere from -20% to +40%, in general. But much like a bell curve, the most common results are concentrated between 0% and 30%.