Bars

The stock market has returned an average of 10% per year over the past 50 years.

By Rachel Warren – Updated Nov 4, 2024 at 10:04 AM EST

Key Points

The S&P 500 averaged 14.8% returns annually from 2012-21, despite fluctuations.
From 2014-24, the 10-year average was 13.45%, totaling over 250% return.
Longer-term stock investing is more reliable than short-term trading.

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An infographic listing several facts about the stock market, including its average returns, volatility and best practices. — Image source: The Motley Fool.

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Returns

Returns are the difference between the initial price of an asset and the dollar value that has been generated after ownership has ended.

The market's results from one year to the next can vary significantly from the average. Let's use the 2012-21 period as an example:

Down 4.4%: 1 year.
Up 2% or less: 1 year.
Up more than 20%: 4 years.
Up between 12% and 19%: 4 years.

To put it another way, six of those 10 years resulted in outcomes that were very different from the 14.8% annualized average return during that decade. Of those six very different years, two generated significantly lower returns (with one year, 2018, resulting in losses), while four years delivered substantially higher returns. Two of those years -- 2013 and 2019 -- generated returns of more than 30%, helping to make up for the years that saw below-average returns.

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Data source: MoneyChimp.

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It's worth highlighting the variance in annual returns from one year to the next vs. the average. Since 1972, here is a breakdown of the yearly results:

Returns of 20% or more: 19 years.
Returns between 10% and 20%: 13 years.
Returns between 0% and 10%: nine years.
Losses between 0% and 10%: four years.
Losses between 10% and 20%: two years.
Losses of more than 20%: three years.

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About the Author

Rachel Warren is a contributing Motley Fool stock market analyst covering pharmaceuticals, biotechnology, medical devices, information technology, and consumer goods. Prior to The Motley Fool, Rachel was a paralegal and legal administrator. She holds a bachelor’s degree in paralegal studies from Liberty University School of Law.

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Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.