The US stock market has a long history of producing double-digit yearly returns. The average yearly return is 10.356% over the last 100 years. Here you’ll find statistics on the average stock market performance over the last 5, 10, 20, 30, 50, 100, and 150 years. As well as insights on when these average returns are useful, when they aren’t, tips for maximizing returns, problems the statistics hide, the biggest up and down years in stocks, and high-return alternative investments to stocks.
This article is updated every couple of months.
Here’s the video summary version of the article:
Things to Consider with Long-Term Stock Market Returns
Many people look at average stock returns and they expect that is what they should make each year. That may be the case, but it also may not. Here are some things to consider.
- These returns are based on the S&P 500 (or other indices discussed). If your only investment is S&P 500 ETFs then you will get similar results to those discussed below. If you have other holdings in your portfolio, your results will be different.
- For most S&P 500 ETFs the yearly expense ratio charged by the fund is minimal, but it will still reduce your return, and that difference will compound over time.
- The returns discussed below are based on holding the index or a similar basket of stocks for the prescribed time period. “Trading” in and out of these positions will result in different returns.
- Reinvesting the dividends has a big impact on performance, as shown in the data below. To get the highest return when stock index investing, reinvest the dividends. Preferably do this through a DRIP or some other program where the dividends are automatically reinvested for you at no charge. This will save the commission costs and the time of having to do it yourself.
- If you aren’t passively invested in index funds, then the long-term average return of the stock indices is not of much use to you, except for comparing your own results to it.
- If you are actively trading and making less than the average historical stock return, then you are better off investing in stock index funds and saving yourself time and effort.
- If your portfolio allocation is different than 100% stock index ETFs, your returns will likely be lower. Gold and bonds have long-term returns that are lower than stocks. If part of your portfolio is allocated to these (and there’s nothing wrong with that), your overall portfolio returns will likely be lower.
- Inflation is the silent killer of cash and low-return investments. The S&P 500 has handily beat inflation over time. If you keep large amounts of money in a savings account, that money’s buying power is being widdled away by inflation at about 2-3% or more per year. More in 2022.
While the long-term average return of the US stock market is roughly 10% per year (based on the S%P 500 index), most people’s average return is less than half of that! A study by JPMorgan found that investors averaged a return of 2.9% per year, while bond and stock returns were much higher over the time frame studied.
Why does this happen? Because most investors buy and sell too much without knowing what they are doing. They buy and sell at the wrong time, but think they’re doing the smart thing.
If you want market average returns, buy-and-hold stock index ETFs.
If you want to beat market average returns, then study how to do that. Don’t actively trade until you have done this. Most short-term traders lose money until they have dedicated significant time, practice, and research to mastering when to buy and sell.
Everyone should passively invest some funds. Set it and forget it for 10 years or more. The Passive Stock Investing Using ETFs eBook lays out the approach that has been compounding people’s wealth for the last 150 years. It shows what to buy, and how to do it.
The 150-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 9.064% over the last 150 years, as of end of January 2023. This assumes dividends are reinvested.
Adjusted for inflation, the 150-year average return (including dividends) is 6.805%.
US Stock Market 150-Year Average Return
|Annualized Return (including dividends)||9.064%|
|Annualized Return (including dividends) Inflation Adjusted||6.805%|
|Annualized Return (no dividends)||4.535%|
|Annualized Return (no dividends) Inflation Adjusted||2.37%|
The S&P 500 hasn’t been around for 150 years. The S&P 500 started in 1957. Prior to this, it was the S&P 90 which was introduced in 1928. Prior to this, other data sources, such as the Cowles Commissions, are used. Robert Shiller, the author of Irrational Exuberance, compiled the data sources which extend back to 1871, and DQYJD further streamlined that data.
All averages are based on monthly average prices, not a specific day. For example, December 2001 to December 2021 for the 20-year average. Since it is a monthly average, you could also think of the time frame as roughly mid-December to mid-December (12 months) as opposed to January 1 to December 31 (12 months).
The 100-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 10.345% over the last 100 years, as of end of January 2023. This assumes dividends are reinvested. Dividends account for about 40% of the total gain over this period.
Adjusted for inflation, the 100-year average return (including dividends) is 7.214%.
US Stock Market 100-Year Average Return
|Annualized Return (including dividends)||10.345%|
|Annualized Return (including dividends) Inflation Adjusted||7.214%|
|Annualized Return (no dividends)||6.288%|
|Annualized Return (no dividends) Inflation Adjusted||3.272%|
The 50-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 10.283% over the last 50 years, as of end of January 2023. This assumes dividends are reinvested.
Adjusted for inflation, the 50-year average return (including dividends) is 6.068%.
The big difference between the annualized return and the inflation-adjusted return here has a lot to do with the high inflation of the 1970s through the early 80s.
US Stock Market 50-Year Average Return
|Annualized Return (including dividends)||10.283%|
|Annualized Return (including dividends) Inflation Adjusted||6.068%|
|Annualized Return (no dividends)||7.272%|
|Annualized Return (no dividends) Inflation Adjusted||3.173%|
The 30-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 9.687% over the last 30 years, as of the end of January 2023. This assumes dividends are reinvested.
Adjusted for inflation, the 30-year average return (including dividends) is 7.015%.
US Stock Market 30-Year Average Return
|Annualized Return (including dividends)||9.687%|
|Annualized Return (including dividends) Inflation Adjusted||7.015%|
|Annualized Return (no dividends)||7.639%|
|Annualized Return (no dividends) Inflation Adjusted||5.016%|
The 20-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 9.775% over the last 20 years, as of the end of January 2023. This assumes dividends are reinvested.
Adjusted for inflation, the 20-year average return (including dividends) is 7.077%.
US Stock Market 20-Year Average Return
|Annualized Return (including dividends)||9.775%|
|Annualized Return (including dividends) Inflation Adjusted||7.077%|
|Annualized Return (no dividends)||7.715%|
|Annualized Return (no dividends) Inflation Adjusted||5.068%|
The 10-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 12.353% over the last 10 years, as of end of January 2023. This assumes dividends are reinvested.
Adjusted for inflation, the 10-year average return (including dividends) is 9.462%.
US Stock Market 10-Year Average Return
|Annualized Return (including dividends)||12.353%|
|Annualized Return (including dividends) Inflation Adjusted||9.462%|
|Annualized Return (no dividends)||10.341%|
|Annualized Return (no dividends) Inflation Adjusted||7.502%|
The 5-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 8.996% over the last 5 years, as of the end of January 2023. This assumes dividends are reinvested. Remember, these figures use monthly averages which make the figures more relevant regardless of the exact day invested.
Adjusted for inflation, the 5-year average return (including dividends) is 4.992%.
US Stock Market 5-Year Average Return
|Annualized Return (including dividends)||8.996%|
|Annualized Return (including dividends) Inflation Adjusted||4.992%|
|Annualized Return (no dividends)||7.26%|
|Annualized Return (no dividends) Inflation Adjusted||3.32%|
The Stock Market Doesn’t Always Trend
These statistics can make it seem like the stock market just marches higher almost every year. But that is not how stocks always act. They actually tend to move sideways quite a bit of the time. Most of the progress in the stock market over the last 150 has come in three big moves: mid-40s to mid-60s, 80s-90s, 2010 to 2021. The stock market has been dropping in 2022. It may end the current Major Bull Market, or it may not.
As the chart below shows, it is also possible to move sideways, with little growth, sometimes for decades. During such times, dividends of a few percent per year would be the only return.
Live SPX Chart on TradingView
Depending on when someone starts investing, there is a bit of luck in terms of how the market will perform after that. If someone started investing around 2000, they wouldn’t have seen much profit until 2013. At that point, a big uptrend was underway.
If you started investing in the last 60s, it was dividend income with little to no gains until the 80s.
As you can see from the chart, there have been multiple 10+ year stretches where it wasn’t great to be a buy-and-hold investor.
Averages can sometimes be deceiving. And a 10% average return doesn’t mean you make 10% each year. Some years you are making 20% or 30%. In other years, you watch your account drop, and in other years all you get are dividends with no gains.
Yet despite all that chop, the long-term average is still 10%.
What are the biggest up and down years in the S&P 500?
Going back to 1928, which is before the S&P 500 existed (it was the S&P 90 from 1928 to 1957), the biggest up year was 46.59% in 1933, and the biggest down year was -47.07% in 1931. Stats according to MacroTrends.
To make market average returns means holding through some of these big down years, or finding a way to avoid/reduce them (without missing out on the up years) which helps boost returns.
Here are some other big down and up years for the S&P 90 / S&P 500:
2002: -23.37% (the Nasdaq Composite stock index fell more than 30% in 2002)
Here you can see all the up and down years. There are more up years than down years, but there are still lots of down years that investors have to live through.
How to Beat the Market Average Returns
There are a number of way to beat and hold. There is of course day trading or swing trading, but those take up more time.
If you are an investor and want to limit your screen time, Steve Burns lays out a “once a month” strategy that beats buy and hold and doesn’t require giving up much time. Unfortunately, even this strategy hasn’t faired as well in the last several years.
Here are the rules:
- If long, continue to HOLD the S&P 500 ETF if on the last day of the month it will close ABOVE its 200-day moving average.
- If long, SELL the S&P 500 ETF if on the last day of the month it will close BELOW its 200-day moving average.
- If in cash (no position), BUY the S&P 500 ETF if on the last of the month it will close ABOVE its 200-day moving average.
- If in cash (no position), stay in cash if on the last of the month if the S&P 500 ETF is going to close BELOW its 200-day moving average.
The full details of the strategy are available at NewTraderU.
Another strategy is to use the Coppock Curve on a monthly chart.
- Sell the S&P 500 if the Coppock Curve closes below 0.
- Buy again when it closes above 0.
Here is how the strategy worked since 1993 on the SPDR S&P 500 ETF (SPY)
I need to do more research on whether the Coppock Curve can beat buy-and-hold returns over longer periods of time.
Everyone should passively invest some funds. Set it and forget it for 10 years or more to compound your wealth.
The Passive Stock Investing Using ETFs eBook lays out how to do it.
Should I trade or invest?
Do both! If you want to trade, allocate some money to a short-term trading account where you can swing trade or day trade. Swing trading or day trading has the potential to produce higher returns than investing because capital can be compounded more often and large drawdowns can be avoided (with a good strategy). Yet passively investing is also a good idea. Allocate some funds to buying stock index funds. It takes little if any work, and this approach has averaged returns of greater than 10% per year over the long term.
Note: most short-term traders fail (read why here).
Does the stock market always go up?
Over the long term, the stock market has gone up. Yet, in any given year, or even for many years, it may not. Average stock market returns are based on investing for the long term. In any given year the major stock indexes could fall, move sideways, or rise.
What are some high-return alternatives to investing in stocks?
There are a number of alternative investments that yield 10% or more per year.
- Comics: 17%
- Art: 15%
- Trading cards: 12%
- Lego: 11%
- Farmland: 11%
- Collectible wine: 11%
- High-end purses/handbags: 8% to 10%
- Real estate (residential, industrial): 10%
- Crypto: 113% (swings wildly)
Gold has not fared as well. Since 1975 the annualized yearly return is 5.6%. Adjusted for inflation, that is a little over 1.6% per year. Silver is less than 5% since 1970, and has about a 1% yearly return factoring for inflation.
Government bonds are a staple in many investment portfolios. Since 1926, these bonds have averaged returns between 5% and 6% per year. High-quality corporate bonds tend to pay 0.5% to 1% per year higher than this.
Trades that last a few weeks to a few months more your style? MyComplete Method Stock Swing Trading Courseguides you through a complete method for swing trading stocks.
By Cory Mitchell, CMT
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.
What is the average 5 year return for the S&P 500? ›
The S&P 500 index is a basket of 500 large US stocks, weighted by market cap, and is the most widely followed index representing the US stock market. S&P 500 5 Year Return is at 46.29%, compared to 44.37% last month and 85.05% last year. This is higher than the long term average of 44.24%.What is the average rate of return historically from the S&P 500 index fund? ›
The index acts as a benchmark of the performance of the U.S. stock market overall, dating back to the 1920s. The index has returned a historic annualized average return of around 11.88% since its 1957 inception through the end of 2021.What is the average stock market return over 5 years? ›
Average Market Return for the Last 5 Years
According to the S&P annual returns from 2017 to 2021, the average stock market return for the last five years was 17.04% (13.64% when adjusted for inflation).
S&P 500 10 Year Return is at 172.1%, compared to 169.2% last month and 244.1% last year. This is higher than the long term average of 112.0%.What has the S&P 500 averaged over the last 100 years? ›
The 100-Year History Yearly Average Return of S&P 500
The historical average yearly return of the S&P 500 is 10.345% over the last 100 years, as of end of January 2023.
' And academic research tends to agree that the S&P 500 is a good investment in the long term, despite occasional drawdowns.What is the average annual return of the S&P 500 in the last 50 years? ›
Stock market returns since 1950
If you invested $100 in the S&P 500 at the beginning of 1950, you would have about $241,255.01 at the end of 2023, assuming you reinvested all dividends. This is a return on investment of 241,155.01%, or 11.25% per year.
Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market.What has the S&P 500 averaged over the last 40 years? ›
The S&P 500 gained value in 40 of the past 50 years, generating an average annualized return of 9.4%.
The stock market has returned a 10% average annual rate for almost 100 years. You can use this average to estimate how much to invest in stocks to reach long-term financial goals, as well as how much your current savings might amount to in the future. The benchmark is only a starting place.
What is the average rate of return for the S&P 500 for the last 20 years? ›
The average return of the stock market over the long term is just above 10%, as measured by the S&P 500 index. Over the past decade, through to March 31, 2022, the annualized performance of the S&P 500 was 14.5%.What is the 30 year return of the S&P 500? ›
S&P 500 annual returns
Over the past 30 years, the S&P 500 index has delivered a compound average annual growth rate of 10.7% per year.
The mean total yearly returns (including dividends) of the S&P 500 from 1996 to mid-June 2022 is 9 percent in nominal terms, or 6.8 percent in real terms—in line with historical results.What's a 200 day moving average on the S&P 500? ›
|Period||Moving Average||Price Change|
The S&P 500 also has an attractive long-term return, averaging about 10 percent annually over long periods. That means that, on average, you'll be able to double your money in just over seven years.Is it difficult to outperform the S&P 500? ›
It is widely acknowledged to be one of the most efficient markets and most difficult benchmarks to beat. For a typical pension plan, 35-40 % of all capital is invested in the S&P 500.How often does the S&P 500 have a negative year? ›
According to Macrotrends.net, the S&P 500 has only seen consecutive years of negative returns three times since 1957, in 1973/1974 and in 2001/2002/2003 with returns getting worse in the second (and third) down year on each of those occasions.Can I become a millionaire in 5 years by investing? ›
Becoming a millionaire in five years is an extremely aggressive goal, but it could happen. Although hitting a home run with an investment is what dreams are made of, the most realistic path is to put aside big chunks of money every year. The historical average return for the S&P 500 index is 8%.Is 7% return on investment realistic? ›
According to conventional wisdom, an annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. This is also about the average annual return of the S&P 500, accounting for inflation. Because this is an average, some years your return may be higher; some years they may be lower.How much do I need to invest to be a millionaire in 5 years? ›
Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.
How much does the S&P 500 return after inflation? ›
S&P 500: $100 in 1900 → $9,789,827.58 in 2023
This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 274,775.66% cumulatively, or 6.65% per year.
The fact that the S&P 500 will continue to grow in the long term is treated like a natural law — the cosmological constant of finance. The speed of light is 299,792,458 m/s, and the S&P 500 has an average annual return of 10%. I wanted to know: Why does the S&P 500 always grow?Does 401k double every 7 years? ›
How To Use the Rule of 72 To Estimate Returns.
|Rate of Return||Years it Takes to Double|
The S&P 500's average annual returns over the past decade have come in at around 14.7%, beating the long-term historic average of 10.7% since the benchmark index was introduced 65 years ago. But the stock market return you'll see today could be very different from the average stock market return over the past 10 years.What is the 10 year average return on the Dow? ›
Nominal and annual return of the last 10 years
Dow Jones Industrial Average closed at 33949 on 2023-02-08, while 10 years earlier (on 2013-02-08) it opened at 13944. Nominally this is 143,47% increase, which equals an annual return of 9,31%.
The average average daily volume (3m) of companies in the sector is 30.865 K with a standard deviation of 47.455 K. You can find companies with similar average daily volume (3m) using this stock screener.Which S&P 500 fund is best? ›
- Fidelity ZERO Large Cap Index (FNILX) ...
- Vanguard S&P 500 ETF (VOO) ...
- SPDR S&P 500 ETF Trust (SPY) ...
- iShares Core S&P 500 ETF (IVV) ...
- Schwab S&P 500 Index Fund (SWPPX) ...
- Shelton NASDAQ-100 Index Direct (NASDX) ...
- Invesco QQQ Trust ETF (QQQ) ...
- Vanguard Russell 2000 ETF (VTWO)
The 200-day moving average calculates the simple average of the closing price of a stock over the most recent 200 trading sessions. The line drawn from those numbers shows the trend of a stock over a long duration. It is not meant for short-term or momentum trading.What is the 2 year return of the S&P 500? ›
S&P 500 2 Year Return is at 4.17%, compared to 9.76% last month and 48.06% last year. This is lower than the long term average of 14.58%.What is the 3 year return of the S&P 500? ›
S&P 500 3 Year Return is at 34.39%, compared to 26.39% last month and 57.08% last year. This is higher than the long term average of 22.70%.
What is the average annual return on the S&P 500 in the last 30 years? ›
S&P 500 annual returns
Over the past 30 years, the S&P 500 index has delivered a compound average annual growth rate of 10.7% per year. Data source: Slickcharts.com.
According to his math, since 1949 S&P 500 investments have doubled ten times, or an average of about seven years each time. In some cases, like 1952 to 1955 or 1995 to 1998, the value of the investment doubled in only three years.What are the 20 year rolling returns for the S&P 500? ›
Through the end of 2018, the S&P 500 Index (SPX) delivered a compound annual growth rate (CAGR) of 5.52% during the past 20 years, versus an average CAGR of 10.7% in all 20-year periods since 1928, Colas told Barron's recently.What has been the average return to the S&P 500 since 1980? ›
Stock market returns since 1980
This is a return on investment of 10,526.41%, or 11.46% per year. This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 2,850.22% cumulatively, or 8.19% per year.