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8 Stock Market Statistics to Keep in Mind as We Start the New Year

MarketDash Editorial Team
3 hours ago
As we enter 2025, these eight historical stock market statistics offer valuable context for investors. From the surprising rarity of average returns to why Wall Street's year-end predictions usually miss the mark, here's what the data tells us about market expectations versus reality.

The stock market usually goes up, but returns vary wildly...

For long-term investors, the calendar shouldn't matter much. January 1st is just another day in the markets. Yet here we all are, inevitably drawn into discussions about what might happen over the next twelve months.

That's precisely why providing historical context around stock market predictions matters so much. Recently, Josh Brown and Michael Batnick invited market analyst Sam Ro onto their show What Are Your Thoughts? to discuss Wall Street's 2026 targets. The conversation surfaced some fascinating statistics that put market predictions in perspective.

Here are the numbers that help explain why one-year forecasts should be taken with several grains of salt:

Wall Street strategists aim for average but miss by a mile: Bespoke Investment Group analyzed year-end price targets since 2000 and found that the average strategist predicted an 8.9% annual return. Reasonable enough, right? The problem is these forecasts were off by an average of 14.1 percentage points. That's not a rounding error.

Average returns almost never happen: Carson Group's Ryan Detrick discovered something counterintuitive. Since 1950, the S&P 500 has delivered returns between 8% and 10% exactly four times. Think about that. The outcome everyone expects is the one that rarely occurs.

Normal includes a huge range of outcomes: DataTrek Research co-founder Nicholas Colas dug into the numbers and found that while the S&P 500's average total return since 1928 is 11.8%, the standard deviation is 19.5 percentage points. Translation: any annual return between -7.7% and +31.3% would be statistically normal. That's a pretty wide target.

When the market wins, it wins big: Ritholtz Wealth Management's Ben Carlson looked at the data since 1928 and noticed something interesting. In positive years, the S&P 500 gained an average of 21%. When stocks go up, they tend to really go up. The flip side? Down years average losses of 13%.

Drawdowns don't predict annual results: JPMorgan Asset Management analysts pointed out that since 1980, the S&P 500's average intra-year maximum drawdown is 14.1%. Sounds scary, but here's the kicker: annual returns ended up positive in 34 of those 45 years, or 75% of the time. Similarly, Creative Planning's Charlie Bilello observed that on any random day since 1928, you had a 75% chance of seeing positive returns one year later.

Earnings estimates are actually pretty good: Here's a surprise. FactSet analysts found that since 2000 (excluding the financial crisis years of 2001, 2008, 2009, and the pandemic year 2020), the average difference between initial annual earnings estimates and reported results was just 0.9%. Analysts can predict corporate profits reasonably well, even if price targets remain elusive.

The takeaway? The stock market has a strong upward bias over time, but the path is rarely what anyone predicts. Annual forecasts make for good conversation, but history suggests they're better entertainment than roadmaps.

Back to Stock Market News

8 Stock Market Statistics to Keep in Mind as We Start the New Year

MarketDash Editorial Team
3 hours ago
As we enter 2025, these eight historical stock market statistics offer valuable context for investors. From the surprising rarity of average returns to why Wall Street's year-end predictions usually miss the mark, here's what the data tells us about market expectations versus reality.

The stock market usually goes up, but returns vary wildly...

For long-term investors, the calendar shouldn't matter much. January 1st is just another day in the markets. Yet here we all are, inevitably drawn into discussions about what might happen over the next twelve months.

That's precisely why providing historical context around stock market predictions matters so much. Recently, Josh Brown and Michael Batnick invited market analyst Sam Ro onto their show What Are Your Thoughts? to discuss Wall Street's 2026 targets. The conversation surfaced some fascinating statistics that put market predictions in perspective.

Here are the numbers that help explain why one-year forecasts should be taken with several grains of salt:

Wall Street strategists aim for average but miss by a mile: Bespoke Investment Group analyzed year-end price targets since 2000 and found that the average strategist predicted an 8.9% annual return. Reasonable enough, right? The problem is these forecasts were off by an average of 14.1 percentage points. That's not a rounding error.

Average returns almost never happen: Carson Group's Ryan Detrick discovered something counterintuitive. Since 1950, the S&P 500 has delivered returns between 8% and 10% exactly four times. Think about that. The outcome everyone expects is the one that rarely occurs.

Normal includes a huge range of outcomes: DataTrek Research co-founder Nicholas Colas dug into the numbers and found that while the S&P 500's average total return since 1928 is 11.8%, the standard deviation is 19.5 percentage points. Translation: any annual return between -7.7% and +31.3% would be statistically normal. That's a pretty wide target.

When the market wins, it wins big: Ritholtz Wealth Management's Ben Carlson looked at the data since 1928 and noticed something interesting. In positive years, the S&P 500 gained an average of 21%. When stocks go up, they tend to really go up. The flip side? Down years average losses of 13%.

Drawdowns don't predict annual results: JPMorgan Asset Management analysts pointed out that since 1980, the S&P 500's average intra-year maximum drawdown is 14.1%. Sounds scary, but here's the kicker: annual returns ended up positive in 34 of those 45 years, or 75% of the time. Similarly, Creative Planning's Charlie Bilello observed that on any random day since 1928, you had a 75% chance of seeing positive returns one year later.

Earnings estimates are actually pretty good: Here's a surprise. FactSet analysts found that since 2000 (excluding the financial crisis years of 2001, 2008, 2009, and the pandemic year 2020), the average difference between initial annual earnings estimates and reported results was just 0.9%. Analysts can predict corporate profits reasonably well, even if price targets remain elusive.

The takeaway? The stock market has a strong upward bias over time, but the path is rarely what anyone predicts. Annual forecasts make for good conversation, but history suggests they're better entertainment than roadmaps.