Based on total return, the average stock market return is about 13% over the past 10 years. Since 1965, the S&P 500 has provided annualized total returns of 10.2% through 2023, according to data compiled by Berkshire Hathaway (BRKB).
10 Year Treasury Rate is at 4.79%, compared to 4.77% the previous market day and 3.96% last year. This is higher than the long term average of 4.25%. The 10 Year Treasury Rate is the yield received for investing in a US government issued treasury security that has a maturity of 10 year.
For the 10 years ending in December 2024, the S&P 500 has outpaced the historical average a bit, returning an annual average of 13.3% with dividends. This is similar to the 12.55% return of the Russell 3000 index, which represents almost the entire US equity market.
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.
S&P 500 Investment Time Machine
Imagine you put $1,000 into either fund 10 years ago. You'd be up to roughly 126.4% — or $3,282 — from VOO and 126.9% — or $3,302 — from SPY. That's not exactly wealthy, but it shows how you can more than triple your money by holding an asset with relatively low long-term risk.
$3,000 X 12 months = $36,000 per year. $36,000 / 6% dividend yield = $600,000. On the other hand, if you're more risk-averse and prefer a portfolio yielding 2%, you'd need to invest $1.8 million to reach the $3,000 per month target: $3,000 X 12 months = $36,000 per year.
A good return on investment is generally considered to be around 7% per year, based on the average historic return of the S&P 500 index, adjusted for inflation. The average return of the U.S. stock market is around 10% per year, adjusted for inflation, dating back to the late 1920s.
Variable Rate of Return: Financial advisors often project an average rate of return for 401(k) plans between 5 to 8% over 20 to 30 years. However, this does not guarantee such returns due to market volatility and other factors.
US 10 Year Note Bond Yield was 4.80 percent on Tuesday January 14, according to over-the-counter interbank yield quotes for this government bond maturity. Historically, the US 10 Year Treasury Bond Note Yield reached an all time high of 15.82 in September of 1981.
Invest in Dividend Stocks
Last but certainly not least, a stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income. However, at an example 4% dividend yield, you would need a portfolio worth $300,000, which is a substantial upfront investment.
Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns -- perhaps even negative returns. Other years will generate significantly higher returns.
dividends? The indices represent regular cash dividend payments paid by S&P 500 constituents.
A $100,000 salary can yield a monthly income of $8,333.33, a biweekly paycheck of $3,846.15, a weekly income of $1,923.08, and a daily income of $384.62 based on 260 working days per year.
Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.
You would have more than doubled your money, with a total investment worth of $2,029.55. That's a 103% return, or a 7.23% annual rate of return. Interestingly, despite Coke's dominance on the world stage, investing in Coke's main rival, Pepsi, 10 years ago would have given you more pop for your buck.
Warren Buffett has said that 90 percent of the money he leaves to his wife should be invested in stocks, with just 10 percent in cash. Does that work for non-billionaires? As far as asset allocation advice goes, 90 percent in stocks sounds pretty aggressive.
The table below shows the present value (PV) of $10,000 in 10 years for interest rates from 2% to 30%. As you will see, the future value of $10,000 over 10 years can range from $12,189.94 to $137,858.49.
The most extreme example of the last 100 years was the crash of the 1930s, which took 25 years to get back to its previous high. The S&P 500 took almost six years to fully recover from the crashes of 2000 (the dot-com bubble) and 2008 (the global financial crisis).
From their peaks in October 2007 until their closing lows in early March 2009, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 all suffered declines of over 50%, marking the worst stock market crash since the Great Depression era.
Our analysis of S&P 500 data from 2000 to 2024 also revealed some clear monthly patterns. November is historically the strongest month, with an average daily return of 0.107% and positive returns 57% of the time. April and July are the next strongest months.