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- The S&P 500 has gained about 10.7% annually since its introduction in 1957.
- The S&P 500's annual average return in 2023 was 24%, so far it is 19% in 2024.
- Returns may fluctuate widely yearly, but holding onto investments over time can help.
The S&P 500's average return over the past decade has been around 10.2%, just under the long-term historic average of 10.7% since the benchmark index was introduced in 1957.
But the stock market return you'll see today could differ greatly from the average over the past 10 years. There are a few reasons why you could see a bigger or smaller return than the average during any given year.
As of July, the S&P 500 had nearly a 16% return in 2024, with technology and AI companies dominating the market. Companies like Nvidia, Alphabet, Microsoft, and Amazon experienced gains that have outgained the broader market.
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The S&P 500 average return
There are many stock market indexes, including the . This index includes 500 of the largest US companies; some investors use its performance to measure the market's health. The annual S&P 500 average return in 2023 was 24%. So far, the average return for 2024 is around 116%.
"Investing can be a good way to grow wealth over the long term and offers the potential for higher returns compared to a typical checking or savings account," says Jordan Gilberti, CFP and senior lead planner at Facet.
Stock market annual returns over the last 10 years
Here's how the yearly annual returns from the S&P 500 have looked over the past 10 years, according to Berkshire Hathaway data that includes earnings from dividends:
Year | S&P 500 annual return |
2014 | 13.7% |
2015 | 1.4% |
2016 | 12% |
2017 | 21.8% |
2018 | -4.4% |
2019 | 31.5% |
2020 | 18.4% |
2021 | 28.7% |
2022 | -18.1% |
2023 | 26.3% |
Berkshire Hathaway has tracked S&P 500 data back to 1965. According to the company's data, the compounded annual gain in the S&P 500 between 1965 and 2023 is 10.2%.
While that sounds like a good overall return, not every year has been the same.
"Investing carries risks — you may be subject to losses and may even lose all the money you put into an investment," Gilberti notes. Just because this is the S&P 500's current return, you can't count on it going forward.
How stock market annual returns are calculated
It's worth noting that these numbers are calculated in a way that may not represent actual investing habits. The figures are based on data from the first of the year compared with the end of the year.
However, the typical investor doesn't buy on the first of the year and sell on the last. While they indicate the investment's growth over the year, they do not necessarily represent an actual investor's return, even in one year.
Factors that influence the stock market
Some of the most common factors factors that influence the stock market are:
- Economic conditions
- Interest rates
- Inflation
- Market sentiment
- Politics
- Supply and demand
Investing in the S&P 500
You're not buying the entire index when buying stocks from the S&P 500. Indexes shouldn't be confused with index funds, which are investments meant to track the performance of certain sectors or assets in the stock market. You can invest in index funds that track the S&P 500 with some of the best stock trading apps.
Some investors choose to buy shares of individual companies on the S&P 500. Some opt for mutual funds, which allow investors to buy a portion of several different stocks or bonds collectively. These individual mutual funds or stocks all have average annual returns, and that particular fund's return may not be the same as the S&P 500 annual returns.
Plus, even if you invest in an S&P 500 index fund, a high expense ratio may reduce your overall returns to below average. Past performances don't necessarily predict future returns.
Buy-and-hold evens out the market's fluctuations
Investing experts, including Warren Buffett and investing author and economist Benjamin Graham, say the best way to build wealth is to keep investments for the long term, a strategy called buy-and-hold investing.
There's a simple reason why this works. While investments will likely go up and down with time, keeping them long-term helps even out these ups and downs. Like the S&P 500's changes noted above, maintaining investments for the long term could help investments and their returns get closer to that average.
FAQs about stock market annual returns
What is the average stock market return per year?
The average stock market return is around 10% per year but fluctuates depending on market sentiment, interest rates, inflation, and other economic conditions.
What is the average return on stocks in the last 30 years?
As of mid-2024, the average return on stocks in the last 30 years, with dividends reinvested, is 10.52%. The average return with dividends reinvested and inflation-adjusted over the previous 30 years is 7.78%.
Investing and Retirement Reporter
Tessa Campbell is an investing and retirement reporter on Business Insider’s personal finance desk. Over two years of personal finance reporting, Tessa has built expertise on a range of financial topics, from the best credit cards to the best retirement savings accounts.ExperienceTessa currently reports on all things investing — deep-diving into complex financial topics, shedding light on lesser-known investment avenues, and uncovering ways readers can work the system to their advantage.As a personal finance expert in her 20s, Tessa is acutely aware of the impacts time and uncertainty have on your investment decisions. While she curates Business Insider’s guide on the best investment apps, she believes that your financial portfolio does not have to be perfect, it just has to exist. A small investment is better than nothing, and the mistakes you make along the way are a necessary part of the learning process.Expertise:Tessa’s expertise includes:
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Education:Tessa graduated from Susquehanna University with a creative writing degree and a psychology minor.When she’s not digging into a financial topic, you’ll find Tessa waist-deep in her second cup of coffee. She currently drinks Kitty Town coffee, which blends her love of coffee with her love for her two cats: Keekee and Dumpling. It was a targeted advertisem*nt, and it worked.
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