Average Stock Market Return Since 19xx

Stock Market Long-Term Average Annual Rate of Return
(e.g., since 1929; past 1, 5, 10, 20 ... years.)

What is the long-term performance history of the stock market? Throughout stock market history, the average yearly return for periods of 25 years or longer has been around 9-10%. Here we mean total return -- i.e., including dividends. Following are the results for some periods of particular interest; results are through year-end 2012.

Average Stock Market Return per year: Last 5, 10, 20 ... Years

• The long-term, more than 100-year performance: Since 1900 (end-of-year 1899), through 2012, I estimate the average total return/year of the DJIA (Dow Jones Industrial Average)  was approximately 9.4%  -- 4.8% in price appreciation, plus approx 4.6% in dividends. (Some numbers may not add up due to rounding.)
• Since 1929 (year-end 1928 -- i.e., before the crash), through 2012, the return was 8.8% (4.6%, plus 4.2%) [note: see The 1929 Stock Market Crash]
• Since end-of-year 1932 (i.e., after the crash): 11.1% (7.0%, plus 4.2%)
• The average annual stock market return for the past twenty-five calendar years (since 1987) was 10.6% (7.9%, plus 2.7%)  The market was up over 40% before the October 19, "Black Monday," crash. After a significant recovery, the Dow actually closed up 6% for the year.
• Stock market returns for the last 20 years (since 1992): 9.6% (7.1%, plus 2.4%) In the middle of one of the longest bull markets in history. [see below for additional 20-year periods] 
• Returns since 1999 (13 years) -- the dot-com bubble year-end peak: 3.4% (1.0%, plus 2.4%).
• Returns for the last 10 years (since 2002): 7.2% (4.6%, plus 2.6%) Year-end trough after the dot-com bubble. [see below for additional 10-year periods]
• For the last 5 years (since 2007), 2.6% (-0.2%, plus 2.8%) Year-end peak of housing bubble.
• Since 2008 year-end trough after the housing bubble: 13.4% (10.5%, plus 2.9%)
• For 2012 the stock market (Dow/DJIA) total return was 10.1% (7.3% plus 2.9%)
• 2012 year-end dividend yield was 2.7%

See also March 2013 Stock Market Performance, and 2012 Stock Market Performance: End-of-Year Update.

Note: For graphs of stock market performance over the long-term, see below:

The above results are for specific periods of special interest. Many readers find it helpful to also look at broader collections of data such as:

Long-Term Stock Market Performance, by Year

100 Years of Stock Market Closing Prices (log graph).
Stock Market Returns by Year: bar chart of total returns (i.e., incl dividends).
Dow Price/Earnings Ratio History since 1929 - Yearly Graph
Dow Dividend Yield & Price/Dividend History - Yearly Graph

Graphs Showing the Range/Variability of Returns Even Over Long Periods

Best & Worst Returns for 1-100 Year Holding Periods (graph of best & worst past returns for 1,2,3 ... 100-year periods),
Dow Rolling 10-Year Returns (graph showing all 10-year returns -- 1900-1910, 1901-1911 ... )
Dow Rolling 20-Year Returns (graph showing all 20-year returns -- 1900-1920, 1901-1921 ... )

Insight Into Factors That Impact Returns

Just 2%/Year in Expenses Could Reduce Your Retirement Portfolio by 50%!: why seemingly small expense levels can have large impacts.
Rolling Returns vs P/E Ratio Graph: Rolling returns graph combined with p/e graph to show P/E at beginning of each 10/20-year period.
Starting P/E Ratio vs. 10-Year Returns: Shows the 10-year returns that result from each initial P/E ratio. A classic way of investigating the relationship between P/E ratio and subsequent returns.
Dow P/E Ratio Impact on Future Returns in Dollars: Returns of purchases made when p/e is high compared to returns of low p/e purchases; the difference it makes in 10 years in dollars.
The Extraordinary Impact of P/E Ratio graphic demonstration of the impact of p/e on short-term (1-year) stock market performance.
Key Contributors to Long-Term Stock Market Performance shows dividends and earnings growth are key determinants of long-term stock market performance.

Some Additional 100-Year Posts

100 Years of Treasury Bond Interest Rate History: U.S. interest rate history.
100 Years of Inflation History: Overview of the impact of inflation on stocks, bonds, housing....

Projecting Future Stock Market Returns

The 10-Year Stock Market Projection

Notes re Data

In all cases above, the returns are from year-end to year-end. In addition, by "stock market" I mean the DJIA (Dow Jones Industrial Average). The results would typically be slightly higher for the S&P 500.  Returns are compounded annually; compounding more frequently would result in slightly higher returns; dividends prior to 1929 have been estimated based upon another stock market index. To calculate the return for periods not listed above, e.g. 1999-2002, see my Dow Compound Growth Rate Calculator.

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Copyright © 2012.                        Last modified: 3/30/2013

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