The S&P 500 has averaged nearly 10% annual returns over decades but faced 10-year losses twice since 1926.
The S&P 500 has delivered average annual returns close to 10% over long periods, despite periodic downturns. Historical data underscores its resilience, recovering from wars, recessions, and financial crises to reach new highs repeatedly.
Analysis of rolling 10-year returns from 1926 to 2023 reveals extremes: the best period yielded 21.4% annual gains, while the worst saw a near 5% annual loss. Negative 10-year returns occurred only twice, during the 1930s and post-dot-com bubble.
While short-term volatility remains unpredictable, the index’s long-term upward trajectory persists. Investors in low-cost funds like the Vanguard S&P 500 ETF (VOO) benefit from this historical pattern, though past performance does not guarantee future results.