Over the past 40 years, the performance of the S&P 500 Index (S&P500) has been like a financial epic. By reviewing the period from 1985 to 2025, which spans across a century, we can gain insight into the fluctuations of this important index.

Over this long period, the annual returns of the S&P 500 have shown distinct characteristics: green represents up years, while red symbolizes down years. A deeper analysis of this data leads us to the following key observations:

First, over the span of these 40 years, the S&P 500 has only experienced declines in 8 years, meaning that for more than 80% of the time, the index has been rising. This data fully demonstrates the long-term growth potential of the U.S. stock market.

Secondly, the financial crisis of 2008 was undoubtedly the most challenging period in the past 40 years, with the S&P 500 experiencing a 37% plunge that year. Following closely was 2022, when the index fell by 18.11%. The significant corrections in these two years remind investors that the market is not always smooth sailing.

However, from a long-term perspective, even when accounting for these down years, the long-term annualized return of the S&P 500 remains at around 10%. This data strongly demonstrates the value of the U.S. stock market as a long-term investment tool.

It is worth noting that for investors who adhere to a long-term investment strategy, time can often offset the impact of short-term fluctuations. Market ups and downs may be unsettling in the short term, but in the long run, patience and discipline often yield substantial returns.

Looking ahead, a three consecutive increases are expected from 2023 to 2025, which may mark the official completion of the economic recovery period in the post-pandemic era.

From an investment perspective, the data from the past 40 years provides us with valuable insights: although short-term fluctuations are unavoidable, time often rewards investors who have patience and discipline. Whether adopting a regular investment strategy or choosing to increase stakes during market downturns, holding U.S. stocks for the long term remains one of the most stable and effective ways to accumulate wealth over the past four decades.

This review of the S&P 500 index spanning 40 years is not only a summary of the past but also a guide for the future investment journey. It reminds us that in the financial markets, long-termism and patience may be the most valuable investment virtues.