Stock market returns average 10%
The S&P 500 index comprises about 500 of America’s largest publicly traded companies and is considered the benchmark measure for annual returns. When investors say “the market,” they mean the S&P 500.
Measured by the S&P 500 index, stocks return an average of about 10% annually over time.
Keep in mind: The market’s long-term average of 10% is only the “headline” rate: You’ll lose purchasing power of 2% to 3% every year due to inflation, which puts the market’s average inflation-adjusted return at about 7% to 8% annually.
The below table compares average annual stock market returns to current bond and online savings account rates, as of March 2019.
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