Since 1926, the US stock market has rewarded investors with an average annual return of about 10%. But as the chart below shows, it’s important to remember that returns in any given year may be sky-high, extremely poor, or somewhere in between.
- Annual returns came within two percentage points of the market’s long-term average of 10% in just six of the past 97 years.
- Yearly returns have ranged as high as up 54% and as low as down 43%.
- Since 1926, annual returns have been positive 71times and negative 26 times.
Understanding the range of potential outcomes can help you stick with a plan and ride out the inevitable ups and downs.
Past performance is no guarantee of future results. Actual returns may be lower. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. Indices are not available for direct investment. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. In US dollars. S&P data © 2023 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.
David is the Co-Founder and Chief Investment Officer of Rappaport Reiches Capital Management. He acts as personal CFO to entrepreneurs and corporate executives, providing organization and clarity in their finances. Please connect with David below. He loves to talk about investing, financial planning, and Aspiritech, a non-profit hiring individuals on the autism spectrum.