% Positive Years (or 'Win Rate') is a simple but powerful metric: out of all the years in the measurement window, how many delivered a return above zero? For the S&P 500, this figure is historically around 70–75%, meaning roughly 3 out of every 4 years will be positive.
This metric is useful for setting long-term expectations. An investor planning to stay invested for 10 years in a broadly diversified index can expect to see 7–8 positive years and 2–3 negative years. Understanding this distribution removes the fear of volatility.
Assets or strategies with a high % Positive Years but low CAGR may be using capital inefficiently — generating stable but modest returns. The best risk-adjusted investments combine a high win rate with a meaningful CAGR.