What Is the Average Stock Market Return?

Based on historical S&P 500 data, the average stock market return is about 10% per year, or 6% to 7% after inflation (not accounting for fees, expenses, and taxes). While that’s the long-term average, annual returns often vary widely.

Average Stock Market Return

The average stock market return of the S&P 500 is about 10% annually – and 6% to 7% when adjusted for inflation. Of course, there have been years with much higher returns and years with much lower returns. Over the past 25 years, from 2000 to 2025, the market peaked at 32% (at the end of 2013) and bottomed at -37% (at the end of 2008).

For context, it’s rare that the average stock market return is precisely 10% in any given year. When looking at nearly 100 years of data, the yearly average stock market return was between 8% and 12% less than 10 times. In reality, stock market returns are typically much higher or much lower.

Average S&P 500 Returns by Year (5-year, 10-year, 20-year, 30-year)

Many investors typically invest in the market for a period of time. For example, they may invest for the long term in the hopes that the investments they buy today may be worth more years from now when they decide to sell. With that in mind, it might be helpful to look at the S&P 500 average return over the last 5, 10, 20, and 30 years to help understand stock price movement.

Looking at shorter and gradually longer time periods can generally help illustrate how certain events have impacted stock market returns over the last three decades.

Period	Average annualized stock market return	Average annualized stock market return adjusted for inflation
5 years (2020 to 2025)	11.6%	8.7%
10 years (2015 to 2025)	13.8%	11.6%
20 years (2005 to 2025)	11.4%	8.6%
30 years (1995 to 2025)	10.4%	7.7%

Source: https://www.macrotrends.net/2526/sp-500-historical-annual-returns

Average S&P 500 Return for the Last 5 Years

According to the S&P annual returns from December 2020 to December 2025, the S&P 500 average return for the last five years was 11.6% (8.7% when adjusted for inflation). It’s possible this figure may have been even higher if stocks’ performance overall had not been marked by pandemic-related volatility early in 2020, and a bear market and high inflation in 2022.

Average S&P 500 Return for the Last 10 Years

Looking at the S&P 500 from December 2015 to December 2025, the average S&P 500 return for the last 10 years is 13.8% (11.6% when adjusted for inflation). The stock market had its ups and downs over the decade, but the only years that experienced losses were 2015, 2018, 2022, with losses of 0.73%, 6.24%, and 19.44% respectively.

Average S&P 500 Return for the Last 20 Years

Looking at the S&P 500 from the end of 2005 to December 2025 the picture changes. The average stock market return for the last 20 years was 11.4% (8.6% when adjusted for inflation). That makes sense given that the United States experienced some major lows and notable highs from 2000 to 2009.

In early 2000, the market was doing well, but from late 2000 to 2002, the dot-com bust contributed to losses for three consecutive years. That period wasn’t helped by the aftermath of 9/11 in 2001.

Then, in 2008, the financial crisis led to huge losses. And in 2022, due to high interest and fears of a recession, the market dropped sharply.

Average S&P 500 Return for the Last 30 Years

Looking at the S&P 500 for the years 1995 to the end of 2025, the average stock market return for the last 30 years is 10.4% (7.7% when adjusted for inflation). Some of this success can be attributed to the dot-com boom in the late 1990s (before the bust), which resulted in high return rates for five consecutive years.

S&P 500 Historical Returns

Here’s a look at the historical returns of the S&P 500. Use the interactive chart to explore:

Why the S&P 500 Average Return Is Rarely ‘Average’

The annual average of 10% is not a reliable indicator of stock market returns for a specific year because outliers can skew the annual average. When the return is much higher or much lower than usual in certain years, those years are known as outliers.

For example, the average stock market return for the last 20 years is a little lower at 11.4%, especially when compared to the return for the last 10 years, which was 13.8%.

But there were negative outliers that affected the 20-year average.

Dot-Com Bubble

Returns from 2000 to 2009 are perfect examples of outliers in the stock market. The late 1990s were the years of the dot-com bubble, when technology and website-based companies became hugely popular with investors. But in 2000, companies like Cisco and Dell placed huge “sell” orders on their stocks, and investors started panic-selling their shares.

This period is often referred to as the dot-com bust, and the market experienced annual losses for three years. In 2000, the average annual loss was 10.14%; in 2001, returns dropped by 13.04%; in 2002, they plummeted by 23.37%.

Financial Crisis of 2008

Another example of an outlier is the financial crisis of 2008. For years, banks had given unconventional loans to people with low income and bad credit so they could buy houses. As more people bought homes, housing prices increased drastically. People could no longer afford their homes, which put lenders in a tough spot.

The Fed proposed a bank bailout bill, but Congress denied the bill in September of that year, resulting in a market crash. Congress passed the bill in October, but it couldn’t immediately undo the damage on the stock market. In 2008, the market fell by a whopping 38.49%.

Market Recovery

The dot-com bust and the financial crisis of 2008 are two prime examples of outliers that have caused stock returns to drop more than usual. But in years following these negative outliers, the stock market soared.

Panic from the dot-com bust and other tensions finally started to calm down in late 2003, and the market return was 26.38% for the year. Annual average returns continued to trend upward for four more years, until the crisis of 2008.

After the market crashed in 2008, it bounced back with a return of 23.45% in 2009 and continued to rise for five years. The first loss was in 2015, and that was only a dip of 0.73%.

Steep drops are often followed by sharp gains — and by consecutive annual gains, even if they aren’t huge. People who panicked and sold their stocks in 2008 once share prices started to drop likely lost a lot of money. But those who held onto their positions probably increased their earnings by 2012, when market returns had finally increased enough to offset how much the market lost in 2008.

When the stock market experiences a negative outlier, it may be helpful for investors to consider keeping the long game in mind.

What Is a Good Annual Return on Stocks?

When discussing the average rate of return on stocks and what might be expected, it’s important for investors to be realistic. As mentioned, the stock market average return tends to hover around 10%, though when you factor in inflation, stock market returns tend to be closer to 6%.

Using the 6% figure as a baseline, an investor actively investing in stocks might choose to construct a portfolio that’s designed to produce that level of returns. Anything above 6% might be considered icing on the cake.

Some investors looking for above-average stock market returns might choose to take a more aggressive approach to building a portfolio, by looking at actively managed funds or momentum trading, for example, to try to capitalize on higher return potential. But those strategies can entail greater risk – and as always, there’s no guarantee that an investor will beat the market. Plus, active trading may mean paying higher expense ratios or commissions, which may eat into investment gains.

Using a buy-and-hold strategy and staying invested when the market moves up or down might help an investor realize consistent returns over time. With dollar-cost averaging, for instance, an investor would continue adding money to the market regardless of how high or low stock prices go. In doing so, they may typically be able to ride the waves of the market as stock market returns increase or decrease, though they may not beat the market.

A buy-and hold strategy may help an investor avoid panic-selling when market volatility sets in. This could be important because getting out of the market (or into it) at the wrong time may significantly impact a portfolio’s overall return profile.

Factors that Impact the Stock Market

Some factors might influence the performance of individual companies more than others, or impact the performance of certain stock sectors more than others. This may play into the so-called average returns of the stock market.

For example, if supply chains are disrupted, as they were during the global Covid pandemic, that might have an impact on manufacturing of various products; demand for those products; the price of consumer goods and commodities; and so on.

Higher employment rates or lower employment rates could also impact markets, as can inflation, interest rates, fears of recession, consumer debt levels, and more.

Because the world is increasingly interconnected, markets that were once considered separate from each other are now more interdependent. The conflict in Ukraine, for example, has had far-reaching implications for Europe and the Middle East, as well as the U.S. and other regions.

As multiple companies’ share prices fluctuate simultaneously, the stock market as a whole can swing up or down. If a trade war or regional conflict or global pandemic affects companies’ production overseas, or consumers’ ability to spend domestically, numerous big businesses’ shares could drop, and the public could become uncertain about the U.S. economy.

As a result, the market could dip. When tariffs on imports and exports ease, some stocks can rise as traders anticipate reduced costs passed on to consumers and to businesses.

Typically this volatility affects stock market returns. When people wonder what their return will be, they’re asking how much they will have gained (or lost) in a year, or 10, 20, or 30 years. While investors invest in different stocks and funds, one simple way to estimate how much an investor might gain is by looking at the average stock market return.

Measuring Growth in the Stock Market

A way to measure stock market returns is by looking at indexes. An index is a group of stocks that represents a section of the stock market, and there are more than 5,000 indexes representing U.S. stocks. Investors may be familiar with the three most popular market indexes: the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500.

When people refer to the stock market and the average stock market return, they’re likely referring to the S&P 500.

The S&P 500 index represents the 500 largest publicly traded companies, such as Microsoft, Apple, Amazon, Meta, and Alphabet. It stands for around 80% of the U.S. stock market capitalization, so the performance of this particular index is typically considered a good indicator of how the market is doing overall.

Future Stock Market Growth Predictions

As seen from the outliers during the dot-com bust and financial crisis, when the stock market has performed poorly, it has tended to eventually bounce back. Similarly, if the stock market did exceptionally well, the market generally eventually slows down and experiences a loss. This may help with evening out the average return on stocks for investors.

The widely accepted rule is that if an investor’s rate of return is low now, they may expect it to be high in the future; if their rate of return is high now, they may expect it to be low in the future. Historically, the market balances out and experiences positive growth overall. Stock market returns increase around 70% of the time.

When share prices peak, then drop by 10% or more, that’s known as a stock market correction. If the market is doing well, it may correct itself by dipping.

All investments have risk, so there’s no way to guarantee a certain stock market return at all, let alone in a specific time frame. Numerous factors affect stocks’ performance, so it’s difficult to accurately predict how a stock will perform. Trying to time the stock market to maximize returns is considered a high-risk strategy.

The Takeaway

While the average stock market return is 10% annually in the U.S., that number has some caveats attached. Realistically, the return is more like 6% to 7% when accounting for inflation. Plus, very few years see a stock market return of 10% – that number generally reflects an average, rather than a norm. Most years the market has higher or lower average returns.

However, “average” isn’t always average. If an investor is invested in a certain sector or certain companies, those returns would likely be different than the stock market overall. Market returns often depend on broader economic conditions that affect investor sentiment, as well as the performance of individual companies.

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FAQ

Is the typical stock market return 10% a year?

Historically, the average stock market return is 10% a year, or about 6% to 7% when adjusted for inflation. However, the actual stock return may vary widely from year to year and may be much higher or lower.

How long does an investor need to be invested to get a good stock market return?

Typically, investing in the market over a period of time, such as 10 years or more may help an investor see a positive return. A longer time horizon might help an investor ride out short term drops in the market. However, there is no guarantee.

How can I measure stock market return?

One way to measure stock market return is to look at a stock market index like the S&P 500. The S&P 500 measures the largest publicly-traded stocks in the U.S. and it is generally considered a good indicator of how the market is performing overall.

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Investment Risk: Diversification can help reduce some investment risk, but cannot guarantee profit nor fully protect in a down market.
Dollar Cost Averaging (DCA): Dollar Cost Averaging (DCA) is an investment strategy where you regularly invest a fixed amount of money regardless of market conditions. This approach aims to reduce the impact of market volatility and lower your average cost per share over time. DCA does not guarantee a profit or protect against losses in declining markets. Investors should consider their financial goals and risk tolerance before using this strategy, understanding that past performance is not indicative of future results. Consult with a financial advisor to determine if DCA is appropriate for your individual circumstances.
S&P 500 Index: The S&P 500 Index is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. It is not an investment product, but a measure of U.S. equity performance. Historical performance of the S&P 500 Index does not guarantee similar results in the future. The historical return of the S&P 500 Index shown does not include the reinvestment of dividends or account for investment fees, expenses, or taxes, which would reduce actual returns. Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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