A Broad market index tracking data since 1926 in the U.S. shows that stocks have generally delivered strong returns over one-year, three-year, and five-year periods following steep declines.
Just one year from a decline of 10% or 20% returns were higher than the long term average of 9.6%. And the return after a 15% decline was within half a percentage point of the average.
Looking three and five years past declines of 10%, 15% and 20% also shows annualized returns averaged higher than the long term average.
