After the S&P 500s 26% return last year and this years strong start, many investors are worried understandably that this bull run is getting ahead of itself.
They shouldnt. The strange-but-true fact is that, statistically speaking, average returns — which have amounted to about 10% a year over nearly a century of trading — arent normal in the stock market for any given year. A second, surprisingly pleasant fact is that so-called “extreme” returns are far closer to what we’d call normal — and they’re mostly on the positive side.
Most folks think of volatility as negativity. We all recognize the NYSEs famously frazzled-looking floor trader, Peter Tuchman, peering up at the Big Board in various states of alarm, with the effect enhanced by his Einstein-style shock of white hair.
Crucially, that image however familiar, convincing and relatable it may be is misleading. Volatility is just movement, whether it’s up or down.
Crunching the numbers, one finds that stocks rise far more often than they fall. Forget the day-to-day or month-to month noise. Since accurate data start in 1925, the S&P 500 gained in fully 73% of rolling 12-month periods nearly three-quarters of them! Stretched to rolling five-year periods that becomes 88%. Across 10-year periods, its a staggering 94.5%.
Meanwhile, throughout that entire, 98-year stretch, there has never been a rolling 20-year period of negative returns. Never.
To work this into your bones a little further, consider that since 1925, US stocks gained more than 20% in 37 of 98 calendar years the most frequent result! Next most frequent? Zero to 20% gains, totaling 35 times. Down between 0% and -20% followed, at 20 years.
Down big was the real rarity, occurring just six times. So, markets posted huge gains six times as often as horrendous declines.
More simply: Stocks beat their 10% long-term average in 58 calendar years. They fell to any degree less than half as often, 26 times. So historically, you are more than twice as likely to celebrate above-average, even huge, years than encounter down years.
Looking back at the past five years, many folks again, understandably fixate on 2022s negativity, calling that volatile. OK! But what of all the great volatility during 2019s 31.5% boom? Or 2021s 28.7%? And, of course, 2023. All four years are extremes.
Even 2020, starting dreadfully amid COVIDs lockdown-driven hyper-fast bear market, finished up 18.4%. I hesitate labeling anything in 2020 normal. But ironically, its 18% return is the closest to average among those years.
The upshot? Big returns simply arent the rarity that too far, too fast bears claim. In bull markets, they are more normal than not. Why? The roughly 10% long-term annual average includes bear markets. Strip out the bears and youll find that during the 14 S&P 500 bull markets before this one, stocks annualized 23%.
Mind you, Im not necessarily suggesting 2024 returns exceeding 20%. But it wouldnt shock me and it shouldnt shock you. The fact is, gains of 20% and more arent abnormal at all.
As for acrophobia, I cant disagree with a fear of hot-air balloons, mountain climbing, or a job washing windows at the Empire State Building but try to get over it when it comes to investing.
Ken Fisher is the founder and executive chairman of Fisher Investments, a four-time New York Times bestselling author, and regular columnist in 21 countries globally.
A 32-year-old man has been charged with 10 counts of attempted murder after a mass stabbing on a high-speed train.
Anthony Williams, 32, from Peterborough, was arrested on Saturday evening following an attack on the Doncaster to London King’s Cross LNER service.
He has been charged with 10 counts of attempted murder, one count of actual bodily harm and one count of possession of a bladed article following a knife attack on a train in Cambridgeshire on Saturday, British Transport Police (BTP) said.
BTP said he has also been charged with another count of attempted murder and possession of a bladed article in connection with an incident on a London train in the early hours of 1 November.
Police said a victim suffered facial injuries after being attacked at 12.46am with a knife on a train at Pontoon Dock station on the Docklands Light Railway (DLR) in east London.
In a statement to Sky News, BTP said the suspect had left the location before police arrived and officers subsequently identified Williams as a suspect.
Williams will appear at Peterborough Magistrates on Monday morning, police said.
Armed police were deployed to Huntingdon, Cambridgeshire, where the train was stopped and made the arrest within eight minutes of the first 999 call.
Image: Forensic teams gathering evidence at Huntingdon train station on Sunday, after a mass train stabbing. Pic: PA
Footage of the arrest has emerged, showing a man on the ground surrounded by officers and a barking police dog, with the sound of a Taser being deployed.
Another man, 35, from London, who was also detained, was later released after officers established he was not involved.
On Monday, Transport Secretary Heidi Alexander told Sky News that one man, originally suffering life-threatening injuries, was now in a critical but stable condition in hospital.
She toldMornings with Ridge and Frost programme: “He went in to do his job, and he left work a hero. And there are people who are alive today because of his actions and his bravery.”
On Sunday, British Transport Police (BTP) confirmed he was a member of LNER rail staff who tried to stop the attacker.
“Having viewed the CCTV from the train, the actions of the member of rail staff were nothing short of heroic and undoubtedly saved people’s lives,” said BTP Deputy Chief Constable (DCC) Stuart Cundy.
The train driver, named as Andrew Johnson, has also been hailed as “courageous” for his actions during the stabbings.
Following the announcement about the charges on Monday, DCC Cundy warned against anyone interfering with their ongoing investigation.
“Our investigation is also looking at other possible linked offences. Following the charges authorised by the Crown Prosecution Service (CPS) I would stress the importance of not saying or publishing anything which might jeopardise or prejudice ongoing criminal proceedings, or the integrity of the investigation.”
Ms Alexander also told Sky News that BTP would be “increasing the visible patrols at stations” over the next few days.
“But generally, our trains are some of the most safest forms of public transport anywhere in the world,” she added.
Image: Armed police officers on patrol at St Pancras International station on Monday morning. Pic: PA
Tracy Easton, chief crown prosecutor for CPS Direct, said: “Our team of out-of-hours prosecutors worked to establish that there is sufficient evidence to bring the case to trial and it is in the public interest to pursue criminal proceedings.
“We worked closely with British Transport Police to review a huge volume of evidence including CCTV. The number of charges will be kept under review as this continues to progress.
“We know the devastating impact the events on Saturday’s train has had and how the incident shocked the entire country. Our thoughts remain with all those affected.”
A pregnant British teenager has been released from jail in Georgia after being held on drug smuggling charges.
Bella May Culley, 19, of Billingham, County Durham, was arrested in May at Tbilisi Airport and accused of attempting to smuggle 12kg of marijuana and 2kg of hashish into the country.
She was found guilty by a Georgian court on Monday and sentenced to five months and 25 days in prison, the total time she had already spent in custody. Her family also paid a 500,000 lari (about £138,000) as part of a plea deal aimed at reducing her sentence.
Culley and her mother, Lyanne Kennedy, both cried as the verdict was read.
Wearing a cream blazer, the teenager looked overwhelmed as she was released from custody on Monday.
Asked how she felt, she said she was “happy” and told reporters she did not expect to be freed.
Image: Bella Culley at an earlier court hearing in May. Pic: RUSTAVI 2/AP
Culley’s mother held her daughter’s hand as she was released.
Georgian prosecutors were considering a two-year sentence, but “decided to consider the time she has already served,” case prosecutor Vakhtang Tsalughelashvili told The Associated Press.
Culley’s lawyer, Malkhaz Salakhaia, said she would be given her passport and would be free to leave the country on Monday.
Please use Chrome browser for a more accessible video player
1:02
Police footage released in May showed Culley in handcuffs as she made an initial court appearance. Pic: AP
The teenager pleaded not guilty to the charges after her arrest, saying she was tortured in Thailand and forced to carry the drugs.
Culley initially pleaded not guilty at a hearing in July to possession and trafficking illegal drugs.
She initially faced a maximum penalty of up to 15 years or life imprisonment, but was in talks with prosecutors about a potential plea bargain.
Image: Bella Culley walks with her mother, Lyanne Kennedy, following her release. Pic: Reuters
In Georgia, a nation of 3.7 million in the South Caucasus, the law allows for financial plea agreements that can be reached to reduce or eliminate a prison sentence in certain cases.
Such plea agreements are often obtained in drug-related cases.
Culley was reported missing in Thailand before her arrest at Tbilisi Airport on May 10.
The transport secretary has ruled out installing airport-style security scanners in stations, following an alleged stabbing attack on a train on Saturday evening.
Speaking to Mornings with Ridge and Frost on Sky News on Monday, Heidi Alexander said the government did not want to make “life impossible for everyone”.
Chris Philp, the Conservative shadow home secretary, has called for “tough and radical action” to tackle knife crime, including rolling out live facial recognition technology in town centres and train stations.
The questions around security on public transport comes after 10 people were injured in an alleged mass stabbing attack on a high-speed train on Saturday, and a train staff member – hailed as a hero for confronting the attacker – remains in a critical but stable condition.
A 32-year-old man from Peterborough has been charged with 11 counts of attempted murder following the attack on the Doncaster to London King’s Cross LNER service near Huntingdon, and another at a station on London’s Docklands Light Railway (DLR), early on Saturday morning.
Image: Armed police officers patrolling at St Pancras International station on Monday. Pic: PA
Asked by Mornings presenter Sophy Ridge if airport-style scanners should be installed at railway stations to ensure public safety on trains, the transport secretary replied: “I don’t think airport-style scanners would be the way to go.
“I understand why you asked the question, and I understand why some of your viewers might be wondering about that.
“We have thousands of railway stations across the UK, and those stations have multiple entrances, multiple platforms. So what we can’t do is make life impossible for everyone.
“But we do need to take sensible and proportionate steps to make the public transport network safe.”
She also said there will be increased “visible” police patrols at train stations for “the next few days” to provide reassurance to the travelling public.
Will extra security be enough to calm the concern?
For commuters at King’s Cross station in London – one of the busiest in the country – it will have been hard not to think of Friday night’s incident in Cambridgeshire.
This morning, I caught the train with passengers heading into the capital, ready for a new week.
Pulling into the concourse, we were immediately met with a handful of police community support officers watching passengers as they spilled off the train.
Home to the Eurostar service, the presence of armed police is a familiar sight at King’s Cross and London St Pancras.
But today additional officers from the Met have been deployed to major stations.
The idea is to reassure passengers they are safe on the train network.
Outside the station, we met grandparents Tracy and Darren from Yorkshire who had travelled down on Saturday morning on the same LNER service that was affected on Friday for a Marti Pellow concert at the O2.
“We were absolutely terrified, we were both really scared,” Tracy told me.
“We got on the same train line that it happened the night before.”
Darren and Tracy are returning to Yorkshire this morning. They are among many who would welcome additional security on the railways.
Darren says: “I’m not going to lie, it makes you worry about like your safety. Are you safe on the trains? No, you’re not.”
Today’s additional police presence is meant to provide reassurance – but will just two days of extra security be enough to calm the concern?
Please use Chrome browser for a more accessible video player
3:14
Man charged over train stabbings
Ms Alexander went on to say that, while she does not want to minimise the “horrific” attack on Saturday, the trains in the UK are “some of the most safest [sic] forms of public transport anywhere in the world”, saying that for every million journeys, there are 27 crimes committed.
She added: “For me, one crime is one crime too many. So we will, after this, review all of our security measures, because that is the right thing to do.”
But Conservative shadow home secretary Chris Philp told Mornings with Ridge and Frost that there needs to be more “surge hotspot policing in high crime areas” to tackle knife crime, and the use of “live facial recognition to identify wanted criminals as they wander round, including as they go to train stations, so they can be arrested”.
“We also need more stop and search as well because stop and search takes knives off the streets,” he added.
Please use Chrome browser for a more accessible video player
3:57
Philp calls for increased use of stop and search
Last week, the government released new data showing that knife homicides have fallen by 18% in a year, while knife crime overall has dropped by 5% – the first reduction in four years.
The Home Office attributed that to the use of hotspot patrols, knife arches that can detect knives in environments like schools, drones, and plain clothes officers, as well as partnerships with campaigners and charities.