125 years and going

2025 goes down as a fairly average year in terms of returns for the S&P 500 (in USD): despite all the drama and volatility during the year, the index still finished up 16.4%. That is actually very consistent with the long-term distribution of outcomes. Over 1900–2025, the S&P 500 delivered positive returns in about 68% of years (with an average gain of around 18%) and negative returns in about 32% of years (with an average decline of about 14.9%). In other words, the market’s long-term 8% to 10% annual return is real, but it is never a smooth ride. At ECP, this reinforces our approach: take a long-term view, focus on quality companies—true “compounders” with resilient earning power even in difficult environments—and stay disciplined on valuations to avoid market excesses. Over time, equities remain the most powerful compounding mechanism for patient investors.