More recently, since 2009, the S&P 500 has suffered two double-digit losses based on month-end figures. In late spring 2010, the S&P fell by 12.71%. Next, from month-end April 2011 to the end of September 2011, the S&P dropped 16.22%. During both of those unsettling times, 4-AC maintained its low-risk profile, losing only 1.88% during the 2012 sell-off and dropping just 0.14% during the 2012 spill. Although it lost money, it fared far better than equities only.
If we break the entire 40-year (1972-2011) period into 38 three-year holding time spans (that is, 1972-74, 1973-75, etc.), we’ll see that the S&P 500 suffered eight negative three-year holding periods and three in excess of 20%. The worst was a loss of 37.61% from 2000 to 2002. However, 4-AC does not have a single negative three-year return. Its lowest three-year total return was an 11.81% gain from 2007-09. “Year-by-year returns” (below) shows the annual data, cumulative growth and the three-year returns for the S&P and 4-AC portfolios.