You Won't See This on TV

Turn on the tv, open a newspaper, or even when you're out with friends, you'll no doubt hear about what the stock market did today.

Or so far today.

Or worse...where they're sure it's going next.

Lost in the shuffle of all of this noise is a calm, rationale, historical perspective. Sure, it can be unnerving when the Dow moves 400 points in an afternoon. But is that typical?

This chart, from our friends at Dimensional Fund Advisors, shows the annual returns for the total U.S. Stock Market in 10% ranges:

The U.S. stock market has a pretty wide variety of annual outcomes, ranging from north of 50% to the good, and 43.5 in the worst year. Here are my key takeaways that you won't here on a financial news network:

• 75% of the time the market is positive, 25% of the time it's negative.
• When the market is positive, it can be very positive. More than 50 of the years above the market rose by more than 10% in positive years.
• In only 6 calendar years, the market fell by more than 20%. It happens, but it is a relatively rare occurrence.

What comes next?

Clearly, nobody can say for sure, even though everyone you hear will sound as if they know. We prefer to look at the evidence, and make decisions accordingly.