A decade under the microscope: the average annual return of the S&P500 since 1928
Since its official creation in 1928, the S&P500 index has established itself as the ultimate benchmark for measuring the performance of the American stock market. Over this period of nearly a century, the nominal average annual return stands at +10.2%, or about +7.2% in real terms once inflation is deducted (source: Robert Shiller, Data Library, 2024). This historic performance includes the major highs and lows of the market, including the Great Depression, the crises of the 1970s, the Internet bubble, and the 2008 financial crisis.
It is crucial to dissect these performances by decades to understand economic cycles, risks, and opportunities. Annual volatility is high, with about 20% of years showing negative performance, but the long-term trend remains solidly upward.
Decadal performance: complete table of average annual returns
| Decade | Nominal average annual return | Real average annual return | Comments |
|---|---|---|---|
| 1930s | -0.1% | -3.5% | Impact of the Great Depression, extreme volatility |
| 1940s | +9.2% | +5.6% | Post-war reconstruction, economic recovery |
| 1950s | +19.3% | +16.1% | Economic expansion, baby boom, industrialization |
| 1960s | +7.8% | +5.0% | End of rapid growth, geopolitical tensions |
| 1970s | +5.9% | +1.5% | Stagflation, oil crisis, high inflation |
| 1980s | +17.5% | +13.7% | Economic reforms, inflation decline |
| 1990s | +18.2% | +15.0% | Tech bubble, strong growth |
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