I've been digging into something interesting about how the stock market actually performs month by month, and the patterns are pretty revealing.

Most people don't realize this, but the S&P 500 has been up way more often than it's been down. Looking at nearly a century of data from 1928 through 2023, the index posted positive returns in about 59% of months. That's barely better than flipping a coin on any given month, but here's where it gets interesting.

The real story emerges when you zoom out. The historical stock market returns by month show that certain times of year actually matter less than you'd think. Everyone talks about selling in May and going away, right? Total myth. The summer months are usually solid, and July has historically been the best single month of the year. Meanwhile, September gets hit hard - that's real - but then the market bounces back just as quickly, probably because of holiday spending enthusiasm.

Here's the thing that actually matters though: time in the market beats timing the market every single time. The odds of positive returns get dramatically better as your holding period stretches. On a monthly basis you're looking at coin-flip odds, but expand that to a year and you're at 69%. Five years? 79%. Ten years? 88%. And here's the kicker - over every single 20-year rolling period since 1928, the S&P 500 has never had a negative return. Not once in nearly a century.

The historical stock market returns data shows that if you just bought an index fund and held it for two decades, you would've made money. Period. No timing needed, no panic selling during crashes. The S&P 500 has also crushed pretty much every other asset class over the past 5, 10, and 20 years - international stocks, bonds, real estate, you name it.

So what's the takeaway? If you're thinking about the market in terms of months or even years, you're probably thinking about it wrong. The real wealth-building happens when you commit to decades. That's where the S&P 500's risk-reward profile actually shines.