- Analysis from eToro shows how loyalty is key to investing, not just relationships
- Holding the S&P 500 for one year gives you a 72% chance of a positive return; rising to 95% over 20 years
- Sticking with certain stocks during rocky periods can pay off, firms such as Meta and BAE Systems bounced back from huge plunges to post triple-digit recoveries
Commitment is as important in investing as it is in a loving relationship, according to analysis from trading and investment platform eToro.
Based on data from the past 100 years, the likelihood of a positive return from holding the S&P 500 for one single year is 72%. However, this rises to 87% if held for 10 years, and 95% if held for 20 years. Data from the UK All Share index tells the same story, with the probability of a positive return rising from 66% for one single year to 83% over a 20-year relationship.
Thanks to compounding, returns across both markets also improve dramatically over longer periods. For the past century, someone investing for a single year would have seen an average return of 9% in the US and 6.4% in the UK, yet over any 20-year period, returns average out at 265% and 245% respectively.
Ben Laidler, Global Markets Strategist at eToro comments on the findings: “Whilst every retail investor goes through rocky patches with their investments, it’s the ones who commit to a long term plan and stay the course who tend to reap the greatest rewards. As our S&P and FTSE data illustrates, time in the markets beats timing the market and the returns improve dramatically over longer periods.”
eToro’s data also highlights the rewards for sticking with your investments through difficult periods. Firms such as Amazon, BAE Systems and Berkshire Hathaway have rewarded loyal investors by recovering from major dips to post handsome returns (Table 1).
Meta was ghosted by many investors after a 77% plunge in 2021 and 2022, but bounced back to deliver a 351% recovery in just over 12 months, posting a total return of 527% over ten years. Similarly, Amazon has delivered a 796% 10-year total return despite a 53% dive between November 2021 and December 2022.
The analysis also points to the dangers of getting swept up in the excitement of a short-term fling. Long-term underperformers including Barclays, Pfizer and St. James’s Place captured the hearts of investors with eye-catching triple figure rallies that quickly fizzled out, leaving some nursing significant losses (Table 2).
Laidler adds: “It can be tempting to cut and run when things aren’t going well with a particular investment but if the company’s fundamentals remain strong, you’re better off avoiding a hasty sale which you might later regret. Just look at the transformation over the last year for big tech stocks such as Meta and Amazon, both of which looked down and out at the end of 2022.”
Table 1 – Stocks that have posted spectacular recoveries after a major dip in last five years
| Forever | Stock | Plunge | Recovery | Returns last 10 years |
| 1 | Amazon | -53% (Nov ‘21- Dec ‘22) | 93% (Dec ‘22 – now) | 796% |
| 2 | Meta | -77% (Sept ‘21 – Nov ‘22) | 351% (Nov ‘22 – now) | 527% |
| 3 | Berkshire Hathaway | -24% (Mar ‘22 – Oct ‘22) | 43% (Oct ‘22 – now) | 239% |
| 4 | BAE Systems | -34% (Feb ‘20 – Nov ‘20) | 176% (Nov ‘20 – now) | 173% |
| 5 | Investec | -74% (March ‘18 – Oct ‘20) | 342% (Oct ‘20 – now) | 73% |
*Share prices as of January 30th 2024
Table 2 – Stocks that made eye-catching rallies in the last five years, but have underperformed since
| Flings | Stock | Rally | Plunge | Returns last 10 years |
| 1 | GameStop | 737% (Jan ‘21) | -60% (Jan ‘21 – now) | 63% |
| 2 | Warner Bros Discovery | 264% (Oct ‘20 – Mar ‘21) | -85% (Mar ‘21- now) | -75% |
| 3 | Pfizer | 122% (Mar ‘20 – Dec ‘21) | -55% (Dec ‘21- now) | -7% |
| 4 | Barclays | 131% (Mar ‘20 – Jan ‘22) | -33% (Jan ‘22- now) | -47% |
| 5 | St. James Place | 128% (Mar ‘20 – Jan ‘22) | -61% ( Jan ‘22 – now) | -15% |
*Share prices as of January 30th 2024
Ben Laidler offers his top tips for a successful relationship with your portfolio:
- Put yourself out there – You’ve seen others around you do it, but never tried it… Investing may be intimidating and getting started can seem the hardest part. However, equipped with the right knowledge, anyone can do it and with returns compounding over time, the earlier you start the better.
- Be in it for the long haul – The old adage, “it’s the time in the market, not timing the market” rings as true as ever. As in any relationship, there will be ups and downs, but history shows that loyalty to investing pays off.
- But remember, it’s okay to change your mind – It can be easy to get swept off your feet and find yourself head over heels with a particular stock that’s in the spotlight. However, like with a relationship, if you think long and hard and come to the conclusion that it’s just not going to work out, then and only then, it’s okay to let it go.
- Know what you’re looking for – Both in love and in investing, it’s important to know what you want. No matter what type of personality you are, establish your investment objectives from the start, so that you can pick a portfolio that can help you reach your goals.
- Don’t judge a book by its cover – Beauty is only skin deep, so before you make a judgement about a company, make sure you do your research on their historical performance, their commitments and values. Knowledge is power when it comes to investing, so before you buy a shiny new stock, make sure you’ve done your research.
* ENDS *
Notes to editors
1 eToro analysed S&P 500 returns between 1871 – 2024, and UK returns from 1710. This process used the following sources:
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