A study of $STI(^STI) fluctuations and yearly returns
Since an investor portfolio of common stocks is a small subset of the STI index, it maybe beneficial to have an idea of the stock market history in terms of fluctuations and returns from yearly perspectives. Based on historical data of the STI index from 1987, these are some observations which hopefully will provide some ideas of the magnitude and duration of stock market swings. I make no attempt to study the trends nor make any predictions about its future. Perhaps this is useful for setting expectations, or preparing long term investors both financially and psychologically for the possibilities.
From 1988 to 2016, for each year the maximum & minimum values, and the closing value for the year were compiled for 29 years of data. Since I don't have any dividends information, they were not added. If dividends were to be considered, say 3% compounded, then the returns will be much better. As always, DYODD, and check for any errors.
1) Minimum 14% in 2014 (2953 to 3388); Maximum 81% in 2008 (1474 to 3475)
2) Average Fluctuations = 34%
Yearly Returns w/o dividends
3) Number of positive years = 17, number of negative years = 12
4) Total returns for 29 years = 250%, CAGR = 4.4%
5) Maximum gain 78% in 1999 (1393 to 2480); Maximum lost -49.6% in 2008 (3482 to 1762)
6) Number of years more than 30% = 5; Less than -30% = 2
7) Number of years between 0% to 30% = 12; Between 0% to -30% = 10
8) Worst stretch was 3 years from 2000 to 2003, declined -46%. Another 3 negative years from 1996 to 1998, declined -39%.
9) Best stretch was 5 years from 2003 to 2007, advanced 160%