What is the expected return of the stock market in the next 10 years?
As a result, we have downgraded our U.S. equity return expectations to an annualized 4.2%–6.2% over the next 10 years from 4.4%–6.4% heading into 2023. Within the U.S. market, value stocks are more attractive than they have been since late 2021, and small-capitalization stocks also appear attractive for the long term.
Morningstar Investment Management
Highlights: 4.6% 10-year nominal returns for U.S. stocks; 4.3% 10-year nominal returns for U.S. aggregate bonds (as of Dec. 31, 2023). Following a major U.S. market rally in 2023, Morningstar Investment Management's 10-year equity outlook dropped relative to where it was in late 2022.
Stock Market Average Yearly Return for the Last 10 Years
The historical average yearly return of the S&P 500 is 12.02% over the last 10 years, as of the end of December 2023. This assumes dividends are reinvested. Adjusted for inflation, the 10-year average stock market return (including dividends) is 8.93%.
The expected return is the profit or loss that an investor anticipates on an investment that has known historical rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these results.
Stock Market Index | 10-Year Return | Annualized Return |
---|---|---|
S&P 500 | 163% | 10.2% |
Dow Jones Industrial Average | 131% | 8.7% |
Nasdaq Composite | 264% | 13.8% |
Stock | Forward price-to-earnings ratio (P/E) |
---|---|
CrowdStrike Holdings Inc. (CRWD) | 73.8 |
Enphase Energy Inc. (ENPH) | 25.3 |
Microsoft Corp. (MSFT) | 30.0 |
Nvidia Corp. (NVDA) | 26.6 |
BNY Mellon's Stock Market Predictions
BNY Mellon believes that U.S. equities will average annual returns of 7.4% across the next 10 years, a nearly full percentage point higher than its 6.5% previous forecast. Meanwhile, aggregate bonds are expected to yield 4.8% annualized returns, up from 4.1%.
Let's review the good times of late 2023. The S&P 500, which tracks the most valuable stocks in the U.S. market, rose 11.2 percent in the last quarter — and had a total return of 11.7 percent, including dividends. For the year, it gained 24.2 percent and returned 26.3 percent, including dividends.
Olive Invest: Stock index values since 2012
However, they bounced back by the end of 2020 into 2021. Index values have held relatively steady growth across the last 10 years. The NASDAQ, S&P 500, and Dow Jones Industrial Average have all doubled in value since 2012.
Is it good to hold stocks for 10 years?
But history is proof the S&P 500 always reaches new heights given enough time, which is why investing for the long term is so important. In fact, staying invested in the stock market for a period of 10 years gives you a 94% chance of making a profit.
There are two general periods where stocks realized a negative return over a 10-year span: one during the Great Depression in the 1930s and the other during the Great Recession in 2008.
![What is the expected return of the stock market in the next 10 years? (2024)](https://i.ytimg.com/vi/9sjJeGYhDTY/hq720.jpg?sqp=-oaymwEcCNAFEJQDSFXyq4qpAw4IARUAAIhCGAFwAcABBg==&rs=AOn4CLArDUO4JvhDI3O1C0I4tMOvoRmcfw)
With returns often above 10%, you'd need to invest around $360,000 to reach your monthly goal of $3,000.
The S&P 500 average return over the past decade has come in at around 12.39%, beating the long-term historic average of 10.7% since the benchmark index was introduced 65 years ago.
- High-yield savings accounts.
- Certificates of deposit (CDs) and share certificates.
- Money market accounts.
- Treasury securities.
- Series I bonds.
- Municipal bonds.
- Corporate bonds.
- Money market funds.
YTD return is the amount of profit (or loss) realized by an investment since the first trading day of the current calendar year. YTD calculations are commonly used by investors and analysts to assess the performance of a portfolio or to compare the recent performance of a number of stocks.
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.
According to conventional wisdom, an annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. This is also about the average annual return of the S&P 500, accounting for inflation. Because this is an average, some years your return may be higher; some years they may be lower.
Over the long term, the average historical stock market return has been about 7% a year after inflation. Looking at long periods of time rather than any one year shows something else—remarkable consistency.
Ticker | Company Name | |
---|---|---|
1 | CELH | Celsius Holdings |
2 | NVDA | NVIDIA |
3 | AMD | Advanced Micro Devices |
4 | NXE | NexGen Energy |
What is the best 10 year run of the stock market?
The 2009-2019 bull run topped the nearly 10-year bull run of the 1990s. The bull run that started in Oct. 1990 lasted 113 months, while the 2009 bull run is going on 127 months. 3 Only one other bull market has lasted longer than seven years, and it was the post-World War II run that started in 1949.
- Bond funds.
- Dividend stocks.
- Value stocks.
- Target-date funds.
- Real estate.
- Small-cap stocks.
- Robo-advisor portfolio.
- Roth IRA.
Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.
Many consider a conservative rate of return in retirement 10% or less because of historical returns.
Good Omens for the S&P 500
“The S&P 500 has set six new all-time highs in 2024, all in January. That works out to an annualized rate of 72 new highs,” says Sam Stovall, Chief Investment Strategist of CFRA Research.
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