From The Motley Fool · Keith Speights · · 1m
Stock Market Crash Strategy
History shows holding S&P 500 funds for 20 years beats crash timing.
In brief
History shows holding S&P 500 funds for 20 years beats crash timing. Buying low-cost S&P 500 index funds and holding for 20 years has a perfect track record since 1928. Originally reported by The Motley Fool.
Warning signs of market turbulence
Treasury yields hit multi-decade highs and stock valuations are at frothy levels by some metrics.
The perfect 20-year strategy
Buy a low-cost S&P 500 index fund like Vanguard S&P 500 ETF (VOO) or State Street SPDR Portfolio S&P 500 ETF (SPYM) and hold for at least 20 years.
Unbroken 20-year track record
The S&P 500 has never produced a negative 20-year total return since 1928, including the Great Depression, World War II, stagflation, dot-com bubble burst, and 2008 financial crisis.
10-year positive returns
The S&P 500 delivered positive returns 94% of the time over any 10-year stretch since 1928.
Why this strategy works
Market crashes are followed by rebounds and 44% of S&P 500 returns over 30 years came from dividends.
What it means
Buying low-cost S&P 500 index funds and holding for 20 years has a perfect track record since 1928.
