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S&P 500 Returns: 9 Facts Investors Needs To Know Before Investing

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S&P 500 historical returns is the broad gauge of us stock market performance year to year basis. Though S & P  500 annual  returns, on average, from 1950 to 2015 was 8.92%, distribution of  S&P historical return was not  smooth  rather return was unpredictable year to year basis.

This table shows s & p 500 returns based on price action without including dividends and inflation.

Date Beginning Price Closing Price Price Change SP 500 Yearly Return
12/31/2016 2043.94 2238.83 194.89 9.535%
12/31/2015 2058.9 2043.94 -14.96 -0.727%
12/31/2014 1848.36 2058.9 210.54 11.391%
12/31/2013 1426.19 1848.36 422.17 29.601%
12/31/2012 1257.6 1426.19 168.59 13.406%
12/31/2011 1257.64 1257.6 -0.04 -0.003%
12/31/2010 1115.1 1257.64 142.54 12.783%
12/31/2009 903.25 1115.1 211.85 23.454%
12/31/2008 1468.36 903.25 -565.11 -38.486%
12/31/2007 1418.3 1468.36 50.06 3.530%
12/31/2006 1248.29 1418.3 170.01 13.619%
12/31/2005 1211.92 1248.29 36.37 3.001%
12/31/2004 1111.92 1211.92 100 8.993%
12/31/2003 879.82 1111.92 232.1 26.380%
12/31/2002 1148.08 879.82 -268.26 -23.366%
12/31/2001 1320.28 1148.08 -172.2 -13.043%
12/31/2000 1469.25 1320.28 -148.97 -10.139%
12/31/1999 1229.23 1469.25 240.02 19.526%
12/31/1998 970.43 1229.23 258.8 26.669%
12/31/1997 740.74 970.43 229.69 31.008%
12/31/1996 615.93 740.74 124.81 20.264%
12/31/1995 459.27 615.93 156.66 34.111%
12/31/1994 466.45 459.27 -7.18 -1.539%
12/31/1993 435.71 466.45 30.74 7.055%
12/31/1992 417.09 435.71 18.62 4.464%
12/31/1991 330.22 417.09 86.87 26.307%
12/31/1990 353.4 330.22 -23.18 -6.559%
12/31/1989 277.72 353.4 75.68 27.250%
12/31/1988 247.08 277.72 30.64 12.401%
12/31/1987 242.17 247.08 4.91 2.028%
12/31/1986 211.28 242.17 30.89 14.620%
12/31/1985 167.24 211.28 44.04 26.333%
12/31/1984 164.93 167.24 2.31 1.401%
12/31/1983 140.64 164.93 24.29 17.271%
12/31/1982 122.55 140.64 18.09 14.761%
12/31/1981 135.76 122.55 -13.21 -9.730%
12/31/1980 107.94 135.76 27.82 25.774%
12/31/1979 96.11 107.94 11.83 12.309%
12/31/1978 95.1 96.11 1.01 1.062%
12/31/1977 107.46 95.1 -12.36 -11.502%
12/31/1976 90.19 107.46 17.27 19.148%
12/31/1975 68.56 90.19 21.63 31.549%
12/31/1974 97.55 68.56 -28.99 -29.718%
12/31/1973 118.05 97.55 -20.5 -17.366%
12/31/1972 102.09 118.05 15.96 15.633%
12/31/1971 92.15 102.09 9.94 10.787%
12/31/1970 92.06 92.15 0.09 0.098%
12/31/1969 103.86 92.06 -11.8 -11.361%
12/31/1968 96.47 103.86 7.39 7.660%
12/31/1967 80.33 96.47 16.14 20.092%
12/31/1966 92.43 80.33 -12.1 -13.091%
12/31/1965 84.75 92.43 7.68 9.062%
12/31/1964 75.02 84.75 9.73 12.970%
12/31/1963 63.1 75.02 11.92 18.891%
12/31/1962 71.55 63.1 -8.45 -11.810%
12/31/1961 58.11 71.55 13.44 23.129%
12/31/1960 59.89 58.11 -1.78 -2.972%
12/31/1959 55.21 59.89 4.68 8.477%
12/31/1958 39.99 55.21 15.22 38.060%
12/31/1957 46.67 39.99 -6.68 -14.313%
12/31/1956 45.48 46.67 1.19 2.617%
12/31/1955 35.98 45.48 9.5 26.404%
12/31/1954 24.81 35.98 11.17 45.022%
12/31/1953 26.57 24.81 -1.76 -6.624%
12/31/1952 23.77 26.57 2.8 11.780%
12/31/1951 20.43 23.77 3.34 16.349%
12/31/1950 16.66 20.43 3.77 22.629%

Data Source: Yahoo finance

 

 

S&P 500 Historical Returns:

On average S&P 500 annual returns was 8.921% from 1950 to 2015. However, Index performance in 21st century is worse than its average historical returns. S&P 500 historical returns, on average, from 2001 to 2015 was only 4.7%

 

S&P 500 Yearly returns
S&P 500 Yearly returns

Recent Bull market S&P 500 returns:

After 2008 great recession, new bull market started from 2009. S&P returns from 2009 to 2015 was 89.9 % and average returns during this period was 12.84 %. Index had its best year in 2013 based on returns and annual returns was 29 %

 

S&P 500 index 5 year, 10 year and 20 year returns:

S&P 500   index returns performance is better in the shorter time period than the longer time period.

Table shows that investors maximum  gains comes from holding s&p 500 1 year period  as both  1 year average return and median are higher than  5 year, 10 year and 20 year period. Actively managed portfolio did better than passively managed portfolio.

Second best S&P 500 historical returns comes from  5 year average returns, 3rd  is 20 year average return and 4th is 10 year average historical returns.

The below table shows the s and p 500  5 year, 10 year and 20 year average return:

S&P 500 average and Median return

SP 500 best yearly performance:

Even though S&P 500 return on average was 8.92 % in year to year basis, S&P 500 made impressive returns to its investors some great years.  S&P 500’s highest annual returns was 45.022% in 1954.

Second best yearly return was 38% in 1958 and third best yearly return was 34% in1995. From 2000 to 2015, S&P 500 best annual return was 29 percent in 2013 and second best yearly return was 26 percent in 2003.

SP 500 best and worst returns

S&P 500 worst yearly return:

 

S&P 500 had lost more than 10 % of its value in 11 times from 1950 to 2015. S&P 500 yearly return was -38 percent in 2008 which is also worst annual return of S&P 500. This negative annual return initiated great recession in US economy in 2008.

S&P 500 second worst yearly return was 29 percent in 1974.

S&P 500 negative yearly return:

S&P 500 historical returns, on average, was -12.353 % in its negative years from 1950 to 2015.

S&P 500 Positive yearly return:

S&P 500 average yearly return was 16.898 percent in its positive year from 1950 to present.

 

Negative and Positive Year Ratio:

S&P 500 historical returns is   favors the positive years. S&P 500 not only had more average return in its positive years but also had more positive years than negative years.

S&P 500 historical returns shows that for every negative year return S&P 550 had 2.66 positive year return. That means that even in the passive investment we will get positive return from S&P 500 return.

Bottom line:

On average S&P500 had 8.92 percent annual return year to year basis. But rate of return can be significantly high if investors are active and mange the investment in accordance with market price signal.

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