Average Stock Market Return for the S&P 500
Average stock market returns depend on which period you measure and the index used to represent the U.S. market.
The index of choice in most cases is the S&P 500. It’s a useful proxy, but it has only been around since 1957. Fortunately, you can use data from Nobel Prize-winning economist Robert Shiller to approximate the S&P 500.
Using Shiller’s data, since 1971 the S&P 500 has delivered an annualized return of 7.58%—or 10.51% with dividends reinvested.
Investors who keep their money at work in the S&P 500 have been able to enjoy an annualized stock market return of around 10% over the long haul.
That doesn’t mean you can expect a 10% return every year. Some years stocks are up, whereas they fall in others. An annualized return is just an average earned over a period of time.