10.36%
Why this number is so important to investing
Do you know what the stock market has returned over the past 100 years?
The average return of the S&P 500 is 10.36% per year.
In total that’s a return of 1,875,113%
Let’s look at it in terms of dollars invested 100 years ago.
$1 invested would have grown to $18,752
$100 invested would have grown to $1,875,213
$1,000 invested would have grown to $18,752,134
This chart does a great job illustrating the past 100 years of stock market return.
The next chart from Brent Donnelly shows how many consecutive up years and down years the S&P 500 has had. A lot more green than black!
S&P 500, consecutive UP years (green) and consecutive DOWN years (black) 1928 to now (2023 = YTD)
Now let’s shorten the timeframe a bit and start with 1993.
Since 1993 through 2022, the S&P 500 is up 1,374%. That return comes despite four large downturns during that span.
As you can see the stock market doesn’t go up every year. Bear markets and market crashes do happen. But over the long-term it continues to go higher.
How often has the stock market been higher versus lower?
📈 Up 74% of the time
📉 Down 26% of the time
With all the ups, downs and all arounds that the stock market experiences, those are great odds over the past 100 years to obtain a positive return. Not to mention an average return of 10.36%.
For all the people who push back about investing in the stock market as “it’s risky” or “it’s gambling” or “I’m afraid of losing money".
I always remind them of 10.36%.
The Coffee Table ☕
Monevator had a great post called Warren Buffett explains why passive investing is a winning strategy. I liked how they took Warren Buffett’s answers over the years to these type of questions and put them all in one article. Kind of seemed like he was writing the article in his own words.
I enjoyed Tom Morgan’s post about the unspoken truths about growth that nobody tells you. You find out by experiencing it on your own. It’s a common road most go down. Something else that isn’t taught in any school. What Nobody Tells You
Thank you for reading! If you enjoyed Spilled Coffee, please subscribe.
Spilled Coffee grows through word of mouth. Please consider sharing this post with someone who might appreciate it.