Chart of the Day: Odds of Gains

Today’s Chart of the Day is from Ritholtz Wealth Management and shows the odds of having a gain while holding stocks represented by the S&P 500.

I often reflect on the one-day odds: there’s a 51% chance the market will go up. As expected, the odds increase over time: 62% over one month, 74% over one year, 93% over 10 years, and 100% over 20 years. (These statistics are widely known in the financial industry.) However, it’s the one-day statistic that sticks in my mind, simply because it is positive. If it were 50%, or only 49%, statistics show that long-term returns would be flat to negative, as the results compound and you proverbially flip the coin over and over.

The lesson? Don’t wait. Don’t try to time the market. Don’t bet it will go down. In the long run, the market soldiers forward.