What Is the Average Stock Market Return? - NerdWallet (2024)

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What is the average stock market return?

The average stock market return is about 10% per year, as measured by the S&P 500 index, but that 10% average rate is reduced by inflation. Investors can expect to lose purchasing power of 2% to 3% every year due to inflation.

» Learn more about purchasing power with NerdWallet's inflation calculator.

The stock market is geared toward long-term investments — money you don't need for at least five years. For shorter time frames, you'll want to stick to lower-risk options — such as an online savings account — and you'd expect to earn a lower return in exchange for that safety.

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The average stock market return isn't always average

While 10% might be the average, the returns in any given year are far from average. In fact, between 1926 and 2022, returns were in that “average” band of 8% to 12% only seven times. The rest of the time they were much lower or, usually, much higher. Volatility is the state of play in the stock market.

But even when the market is volatile, returns tend to be positive in a given year. Of course, it doesn’t rise every year, but over time the market has gone up in about 70% of years.

» Intrigued? Learn how to invest in stocks

Key terms

Key term



The profit or loss on an investment since its purchase. If you bought a stock for $10 and it's worth $11 now, that's a 10% return.


A group of stocks whose performance is used as a measuring stick for the whole stock market, like the S&P 500 or Dow Jones Industrial Average.

Market cycle

The repeating pattern of the stock market — alternating between bull markets (upward trends) and bear markets (downward trends).


The group of investments you own, like stocks, bonds and funds.

5-year, 10-year, 20-year and 30-year S&P 500 returns

Below is a table showing the S&P 500's price returns over different timeframes, as of the end of 2022.

The table shows that while the market has a long-term average annual return of 10%, year-to-year returns can vary significantly. The five-year return factors in the post-pandemic surge and the 2023 recovery. The 20-year return includes the Great Recession, and the 30-year return includes the dot-com crash of the early 2000s.

» Want some practice first? Try paper trading

Period (start-of-year to end-of-2023)

Average annual S&P 500 return

5 years (2019-2023)


10 years (2014-2023)


15 years (2009-2023)


20 years (2004-2023)


25 years (1999-2023)


30 years (1994-2023)


Stock data is from macrotrends.net and is intended solely for informational purposes, not for trading purposes.

What to expect the stock market to return

There are no guarantees in the market, but this 10% average has held remarkably steady for a long time.

So what kind of return can investors reasonably expect today from the stock market?

The answer to that depends a lot on what’s happened in the recent past. But here’s a simple rule of thumb: The higher the recent returns, the lower the future returns, and vice versa. Generally speaking, if you're estimating how much your stock-market investment will return over time, we suggest using an average annual return of 6% and understanding that you'll experience down years as well as up years. You can use NerdWallet's investment calculator to see what 6% growth looks like based on how much you're planning to invest.

Here are three key takeaways if you’re looking to make money in the stock market.

1. Temper your enthusiasm during good times. Congratulations, you’re making money. However, when stocks are running high, remember that the future is likely to be less good than the past. It seems investors have to relearn this lesson during every bull market cycle.

2. Become more optimistic when things look bad. A down market should cause you to celebrate: You can buy stocks at attractive valuations and anticipate higher future returns.

3. You get the average return only if you buy and hold. If you trade in and out of the market frequently, you can expect to earn less, sometimes much less. Commissions and taxes eat up your returns, while poorly timed trades erode your bankroll. Study after study shows that it’s almost impossible for even the professionals to beat the market. It's good to rebalance your portfolio occasionally. That means selling off a little bit of the investments that have gained more than expected, and buying a little bit of the ones that have underperformed in order to bring the portfolio back to its target composition. But other than a little bit of rebalancing, try to touch your investments as little as possible.

Over time even a few percentage points can make the difference between retiring with a tidy nest egg and continuing to drudge away in your golden years.

» Start small: How to invest $500

Markets, demystified

Register with NerdWallet or sign in to read our monthly stock market outlook, and keep up with the terminology, news and events investors should know about.

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What Is the Average Stock Market Return? - NerdWallet (4)

Ready to get started?

If the market’s long-term return sounds attractive to you, it’s easy to get started. You’ll first need to open a brokerage account, which allows you to buy and sell stock market investments. If you're not sure where to open your account, see our list of the best online brokers.

» Need a little help? Learn how to open a brokerage account.

What Is the Average Stock Market Return? - NerdWallet (2024)


What Is the Average Stock Market Return? - NerdWallet? ›

Average Market Return for the Last 5 Years

According to the S&P annual returns from 2018 to mid-2023, the S&P 500 average return for the last five years was 11.33% (7.28% when adjusted for inflation). That's above the average stock market return of 10%.

What is a realistic stock market return? ›

Average Market Return for the Last 5 Years

According to the S&P annual returns from 2018 to mid-2023, the S&P 500 average return for the last five years was 11.33% (7.28% when adjusted for inflation). That's above the average stock market return of 10%.

What is the average stock market return for the last 30 years? ›

Stock Market Average Yearly Return for the Last 30 Years

The average yearly return of the S&P 500 is 10.22% over the last 30 years, as of the end of February 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 7.5%.

What is the average stock market return over 40 years? ›

Stock Market Historical Returns

40 Years (1982 – 2022): 11.6% annual return. 30 Years (1992 – 2022): 9.64% annual return. 20 Years (2002 – 2022): 8.14% annual return.

What is the ROI of the S&P 500? ›

S&P 500 1 Year Return is at 27.86%, compared to 28.36% last month and -9.30% last year. This is higher than the long term average of 6.70%. The S&P 500 1 Year Return is the investment return received for a 1 year period, excluding dividends, when holding the S&P 500 index.

Is 7% return on investment realistic? ›

General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.

How much money do I need to invest to make $3 000 a month? ›

Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.

How much money do day traders with $10000 accounts make per day on average? ›

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

How much should a 30 year old have in stocks? ›

One good guideline is the Rule of 110, which says that your stock allocation should be 110 minus your age. So, if you're 30, then you should own 80% stocks and 20% bonds.

What is the safest investment with the highest return? ›

Here are the best low-risk investments in April 2024:
  • High-yield savings accounts.
  • Money market funds.
  • Short-term certificates of deposit.
  • Series I savings bonds.
  • Treasury bills, notes, bonds and TIPS.
  • Corporate bonds.
  • Dividend-paying stocks.
  • Preferred stocks.
Apr 1, 2024

What is the average rate of return on a 401k? ›

Many retirement planners suggest the typical 401(k) portfolio generates an average annual return of 5% to 8% based on market conditions. But your 401(k) return depends on different factors like your contributions, investment selection and fees. Sometimes broader trends can overwhelm these factors.

How much stock should I own at 40? ›

According to the rule of 100, 40-year-olds should allocate 60% of their savings to equity investments. That means the median earner would keep $101,400 of their $169,000 nest egg in stocks at age 40, with the rest held in safer and more liquid bonds and cash.

How long does it take to double your money in the stock market? ›

What Is the Rule of 72?
Annual Rate of ReturnYears to Double
6 more rows
Feb 14, 2024

How much would $1000 invested in the S&P 500 in 1980 be worth today? ›

In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500, then you would be sitting on a cool $1.2 million today.

Is it wise to invest in VOO? ›

Vanguard S&P 500 ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOO is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market.

Is Vanguard S&P 500 a good investment? ›

The Vanguard S&P 500 ETF (VOO -0.84%) is a top choice for most index fund investors. Even Warren Buffett recommends it above any other investment. There's a good reason for that. Its low expense ratio and tight index tracking make it a top choice for anyone looking to match the returns of the S&P 500.

What is the average stock market return over 20 years? ›

The S&P 500 returned 345% over the last two decades, compounding at 7.7% annually. But with dividends reinvested, the S&P 500 delivered a total return of 546% over the same period, compounding at 9.8% annually. Investors can get direct, inexpensive exposure to the index with a fund like the Vanguard S&P 500 ETF.

What is the expected return of the stock market in the next 10 years? ›

Investors' 10 year expected return stood at 7.2% in December 2023, slightly above the reading of 7.0% in October 2023. A second line shows the average stock market return that investors expect over the coming 12 months. The data are shown on an every-other-month basis from February 2017 through December 2023.

What is the 30 year average return on the Nasdaq? ›

The Nasdaq has an average annualized return of 10.4% for the past 30 years. On the other hand, the S&P 500 – an index that tracks 500 leading companies listed on U.S. stock exchanges – gained a cumulative 875% over the last 30 years.

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