Backtest: Buy and Hold JPM (JPMorgan Chase & Co.)

This analysis evaluates a buy-and-hold strategy over the past 45 years, providing a historical perspective on JPM's performance from 1980-03-17 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of JPM on 1980-03-17, at a price of $1.05 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of JPM had risen to $296.00. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $2,824,525.53 — a total gain of 28,145.26%.

This translates into an annualized return of 13.27% over the entire period. This return is moderately above long-term averages. It reflects solid long-term performance and an effective strategy.

Drawdown and Risk

The maximum drawdown recorded during this period was 74.02%. This drawdown began after a peak price of $31.43 on 2000-03-23, and reached its lowest point on 2002-10-09 when the price fell to $8.17. The drawdown lasted for 930 days.

The drawdown was very large, indicating high sensitivity to adverse market conditions. Strategies with this profile may offer strong upside but require enduring deep declines. The maximum drawdown lasted over two years, reflecting a prolonged period of market weakness or asset-specific decline. Recovery from such drawdowns can be psychologically and financially difficult.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.18, reflecting the tradeoff between return and volatility.

The Calmar Ratio is on the lower side of what's commonly seen in broad-market strategies over extended periods.