TIM THOMAS

What is the Average Stock Market Return?

Do you want to know what is the actual average stock market return? We’ll go into it in detail here.

Why The ‘Average’ Stock Market Return Doesn’t Work

When you’re calculating the average stock market return, percentage returns aren’t reliable. Example: you have invested $1,000 in the stock market. Your first year, you lose 30% of your initial value. That hurts. You now have $700 in the stock market. Luckily, in your second year, you gain 30%. YEAHH, that means I’m back on track for the $1,000 right? Well, almost. $700 + 30% return = $910.

When you have had a loss, it takes a larger percentage growth to return to your initial value. That’s why it’s best to check an online calculator that takes the Compound Annual Growth Rate (CAGR)

What Is The Average Stock Market Return?

The average stock market return depends on the timeframe of the market, what you consider the stock market, and what assumptions you make.

Factors That Influence Your Stock Market Return

1. Check Your Investing Period 2. Watch The Fees 3. Don’t Forget To Diversify

So, What IS The Average Stock Market Return?

When we check the average stock market return, we will first focus on the S&P 500.

Stock Market Returns Aren’t Average

Even when we look at the average stock market returns over a period of 10 years, there is no real average that we can point out. Volatility is very real in the stock market, and you can see that in the table.

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