Here's the Average Stock Market Return Over the Last 10 Years | The Motley Fool (2024)

Strong gains across the S&P 500, Dow Jones, and Nasdaq over the last decade are evidence that patience is the key to making money in the stock market.

The U.S. stock market is the largest stock market in the world, accounting for 43% of the $106 trillion global equity market last year. U.S. stocks have created substantial wealth over time, something Warren Buffett attributes to a unique combination of commerce and innovation. Currently, 17 of the 20 largest companies in the world are U.S. companies.

The U.S. stock market is divided in different ways, but its performance is primarily measured through three major financial indexes: the S&P 500 (^GSPC -2.12%), the Dow Jones Industrial Average (^DJI -1.51%), and the Nasdaq Composite (^IXIC -3.26%).

Those indexes share certain stocks in common, but investors view them differently. Read on to see how all three indexes performed over the last decade as of Jan. 15, 2024.

S&P 500

The modern was launched in 1957, but its roots date back to a precursor index created in 1923. The S&P 500 measures the performance of 500 large U.S. companies representing a blend of value stocks and growth stocks. The index accounts for about 80% of domestic equities by market capitalization, so it's widely regarded as the best benchmark for the entire U.S. stock market.

The five largest components of the S&P 500 are detailed below:

  1. Microsoft: 7.1%
  2. Apple: 6.8%
  3. Alphabet: 3.9%
  4. Amazon: 3.5%
  5. Nvidia: 3.3%

The S&P 500 returned 163% over the last decade, compounding at 10.2% annually. Investors can get direct exposure to the index with the Vanguard S&P 500 ETF (NYSEMKT: VOO). Warren Buffet has often recommended that strategy because very few investors manage to outperform the S&P 500. That includes professional money managers. In fact, less than 15% of all large-cap funds beat the S&P 500 over the last decade.

Dow Jones Industrial Average

The Dow Jones Industrial Average measures the performance of 30 large U.S. companies, all of which are typically included in the S&P 500. Selection is limited to companies that meet three criteria: excellent reputation, sustained earnings growth, and widespread interest among investors. For that reason, the Dow Jones is commonly regarded as a benchmark for blue chip stocks.

The five largest components of the Dow Jones are detailed below:

  1. UnitedHealth Group: 9.4%
  2. Microsoft: 6.7%
  3. Goldman Sachs: 6.6%
  4. Home Depot: 6.2%
  5. Amgen: 5.3%

The Dow Jones returned 131% over the past decade, compounding at 8.7% annually. Investors can get direct exposure to the index with the SPDR Dow Jones Industrial Average ETF (NYSEMKT: DIA). While the index has underperformed the S&P 500 over the past decade, it has also been less volatile than the S&P 500 due to its blue chip composition.

Nasdaq Composite

The Nasdaq Composite measures the performance of more than 3,000 companies, all of which trade on the Nasdaq Stock Exchange. The vast majority of its constituents are U.S. companies, though the index does provide a small amount of international exposure. The Nasdaq is heavily weighted toward the high-growth technology and consumer discretionary sectors, and it's commonly considered a benchmark for growth stocks.

The five largest components of the Nasdaq are detailed below:

  1. Apple: 12.3%
  2. Microsoft: 11.5%
  3. Alphabet: 6.7%
  4. Amazon: 6.5%
  5. Nvidia: 5.1%

The Nasdaq returned 264% over the last decade, compounding at 13.8% annually. Investors can get direct exposure to the index with the Fidelity Nasdaq Composite ETF (NASDAQ: ONEQ). As a caveat, while the index beat the S&P 500 over the last decade, it has also been more volatile than the S&P 500 due to its highly concentrated composition.

Patience is key to turning a profit in the stock market

Investors can learn an important lesson by analyzing historical stock market returns. All three major financial indexes have suffered multiple corrections and two bear markets during the past decade, but the S&P 500 and the Dow Jones has more than doubled in value, and the Nasdaq has more than tripled.

To make comparisons easier, I've detailed the returns across all three indexes in the chart below.

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%

Data source: YCharts. Chart by Author. As of Jan. 15, 2024.

Here's the bottom line: The three major U.S. stock market indexes were profitable investments over the last decade, and investors have no reason to expect a different outcome over the next decade. That means any of the index funds discussed above are likely to be moneymaking investments over the next 10 years (and beyond).

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Goldman Sachs Group, Home Depot, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends Amgen and UnitedHealth Group. The Motley Fool has a disclosure policy.

Here's the Average Stock Market Return Over the Last 10 Years | The Motley Fool (2024)

FAQs

Here's the Average Stock Market Return Over the Last 10 Years | The Motley Fool? ›

Here's the average stock market return for the last 10 years

What is the average return on Motley Fool? ›

The average return of all 500+ Motley Fool Stock Advisor recommendations since the launch of this service in 2002 is 751% vs the S&P500's 161%. That means they are now beating the market by OVER 4X since inception. They have a win rate of 65% profitable stock picks.

What is the average annual return on the Nasdaq over the last 10 years? ›

Average returns
PeriodAverage annualised returnTotal return
Last year25.8%25.8%
Last 5 years21.2%161.6%
Last 10 years20.7%558.8%

What is the return on Motley Fool portfolio? ›

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Since 2003, this portfolio has returned 1,227.5%, outperforming the market by 759.3% using its optimal tax efficient rebalancing period and 10 stock portfolio size.

What is the average rate of return for the S&P 500 for the last 20 years? ›

Average returns
PeriodAverage annualised returnTotal return
Last year24.3%24.3%
Last 5 years15.7%107.1%
Last 10 years15.6%325.1%
Last 20 years11.1%725.5%

What is the rule of 72 Motley Fool? ›

Let's say that you start with the time frame in mind, hoping an investment will double in value over the next 10 years. Applying the Rule of 72, you simply divide 72 by 10. This says the investment will need to go up 7.2% annually to double in 10 years. You could also start with your expected rate of return in mind.

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Motley Fool Stock Advisor has a strong track record of stock recommendations with investment returns that have outperformed the broader market over the long term. Investors are still advised to diversify their portfolios with more than just Motley Fool Stock Advisor's picks.

What was the Dow Jones average return the last 10 years? ›

The Dow Jones returned 131% over the past decade, compounding at 8.7% annually. Investors can get direct exposure to the index with the SPDR Dow Jones Industrial Average ETF (NYSEMKT: DIA).

What is the average stock market growth over 10 years? ›

5-year, 10-year, 20-year and 30-year S&P 500 returns
Period (start-of-year to end-of-2023)Average annual S&P 500 return
5 years (2019-2023)15.36%
10 years (2014-2023)11.02%
15 years (2009-2023)12.63%
20 years (2004-2023)9.00%
2 more rows
May 3, 2024

What has the S&P 500 averaged over the last 10 years? ›

The historical average yearly return of the S&P 500 is 12.58% over the last 10 years, as of the end of May 2024. This assumes dividends are reinvested. Adjusted for inflation, the 10-year average stock market return (including dividends) is 9.52%.

What is the 4% rule Motley Fool? ›

It argues that, in order to make your retirement savings last through the end of your life, you first withdraw 4% of your retirement savings balance. Then, every year after that, you withdraw the same dollar amount adjusted for inflation.

What is the historical performance of The Motley Fool? ›

The Motley Fool Stock Advisor stock picks also set a record with an average return since inception of 751% vs. the S&P500's 161%. That means that over the last 22 years their picks are beating the market by 590% so they are quadrupling the S&P500's return.

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Top 10 Holdings
TickerCompany NameWeighting
AMZNAmazon.com Inc5.07%
METAMeta Platforms Inc4.75%
BRK/BBerkshire Hathaway Inc4.52%
LLYEli Lilly & Co3.49%
6 more rows

What is the annual rate of return for the S&P 500? ›

Basic Info. S&P 500 1 Year Return is at 20.34%, compared to 22.70% last month and 11.11% last year. This is higher than the long term average of 6.91%. The S&P 500 1 Year Return is the investment return received for a 1 year period, excluding dividends, when holding the S&P 500 index.

What is the 20 year average return on the Nasdaq? ›

The Nasdaq Composite had the strongest 20-year performance after rising 687%, or 10.9% annually. The Fidelity Nasdaq Composite ETF is one way to invest in the index.

What is the expected return of the stock market in the next 10 years? ›

The largest shift was in U.S. small-cap stocks, where our forecasts for annualized returns for the next decade range from 5.0% to 7.0% as of June 30, 2024, up from 4.3% to 6.3% as of the March 31, 2024, running of the Vanguard Capital Markets Model (VCMM).

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Bottom Line: Which is better for investors? Both Seeking Alpha and The Motley Fool know exactly who their target audience is and serves each one exceedingly well. If you are new to investing and just want to beat market returns in the long term, The Motley Fool's different services might be for you.

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See 3 “Double Down” stocks »

The Motley Fool has positions in and recommends Amazon, Chewy, and Meta Platforms. The Motley Fool has a disclosure policy.

What is a good average return on stocks? ›

A good return on investment is generally considered to be about 7% per year, based on the average historic return of the S&P 500 index, and adjusting for inflation.

What is moving average Motley Fool? ›

The moving average is the average price of the stock or index over a set period. The most-used numbers are the 50-day and 200-day. When the 50-day is above the 200-day, it is a bullish indicator and vice versa.

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