Comprehensive guide to the average stock market return over the past 10 years (2024)

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• The S&P 500 has gained about 10.7% annually since its introduction in 1957.
• The S&P 500's annual average return in 2023 was 24%, so far it is 19% in 2024.
• Returns may fluctuate widely yearly, but holding onto investments over time can help.

The S&P 500's average return over the past decade has been around 10.2%, just under the long-term historic average of 10.7% since the benchmark index was introduced in 1957.

But the stock market return you'll see today could differ greatly from the average over the past 10 years. There are a few reasons why you could see a bigger or smaller return than the average during any given year.

As of July, the S&P 500 had nearly a 16% return in 2024, with technology and AI companies dominating the market. Companies like Nvidia, Alphabet, Microsoft, and Amazon experienced gains that have outgained the broader market.

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The S&P 500 average return

There are many stock market indexes, including the . This index includes 500 of the largest US companies; some investors use its performance to measure the market's health. The annual S&P 500 average return in 2023 was 24%. So far, the average return for 2024 is around 116%.

"Investing can be a good way to grow wealth over the long term and offers the potential for higher returns compared to a typical checking or savings account," says Jordan Gilberti, CFP and senior lead planner at Facet.

Stock market annual returns over the last 10 years

Here's how the yearly annual returns from the S&P 500 have looked over the past 10 years, according to Berkshire Hathaway data that includes earnings from dividends:

Berkshire Hathaway has tracked S&P 500 data back to 1965. According to the company's data, the compounded annual gain in the S&P 500 between 1965 and 2023 is 10.2%.

While that sounds like a good overall return, not every year has been the same.

"Investing carries risks — you may be subject to losses and may even lose all the money you put into an investment," Gilberti notes. Just because this is the S&P 500's current return, you can't count on it going forward.

How stock market annual returns are calculated

It's worth noting that these numbers are calculated in a way that may not represent actual investing habits. The figures are based on data from the first of the year compared with the end of the year.

However, the typical investor doesn't buy on the first of the year and sell on the last. While they indicate the investment's growth over the year, they do not necessarily represent an actual investor's return, even in one year.

Factors that influence the stock market

Some of the most common factors factors that influence the stock market are:

• Economic conditions
• Interest rates
• Inflation
• Market sentiment
• Politics
• Supply and demand

Investing in the S&P 500

You're not buying the entire index when buying stocks from the S&P 500. Indexes shouldn't be confused with index funds, which are investments meant to track the performance of certain sectors or assets in the stock market. You can invest in index funds that track the S&P 500 with some of the best stock trading apps.

Some investors choose to buy shares of individual companies on the S&P 500. Some opt for mutual funds, which allow investors to buy a portion of several different stocks or bonds collectively. These individual mutual funds or stocks all have average annual returns, and that particular fund's return may not be the same as the S&P 500 annual returns.

Plus, even if you invest in an S&P 500 index fund, a high expense ratio may reduce your overall returns to below average. Past performances don't necessarily predict future returns.

Buy-and-hold evens out the market's fluctuations

Investing experts, including Warren Buffett and investing author and economist Benjamin Graham, say the best way to build wealth is to keep investments for the long term, a strategy called buy-and-hold investing.

There's a simple reason why this works. While investments will likely go up and down with time, keeping them long-term helps even out these ups and downs. Like the S&P 500's changes noted above, maintaining investments for the long term could help investments and their returns get closer to that average.

FAQs about stock market annual returns