The Bumpy Road to the Market's Long-Term Average

Dimensional Fund Advisors

Chart showing number of years the S&P 500 index has had positive returns vs. number of years it has had negative returns.

Source: Dimensional Fund Advisors

Since 1926, the US stock market has rewarded investors with an annualized return of about 10%. But it’s important to remember that returns in any given year may be sky-high, extremely poor, or somewhere in between.

Annual returns came within two percentage points of the market’s long-term average of 10% in just seven of the past 96 years.
Yearly returns have ranged as high as up 54% and as low as down 43%.
Since 1926, annual returns have been positive 71 times and negative 25 times.

_{In US dollars. S&P data © 2022 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. The S&P 500 is the Standard & Poor’s index calculated on a total return basis. Widely regarded as a benchmark gauge of the U.S. equities market, this index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The S&P 500 focuses on the large-cap segment of the market, with over 80% coverage of U.S. equities.}

_{The index performance data appearing or referenced (directly or indirectly) herein has been compiled by the respective copyright holders, trademark holders, or publication/distribution right owners of each index. Historical performance results for investment indexes and/or categories are for illustrative purposes only and do not represent actual portfolio performance. The indexes and/or categories generally do not reflect the deduction of transaction and/or custodial charges, or the deduction of an investment-management fee, which would decrease historical performance results. Investors cannot invest directly in an index.}

This article is intended for educational and informational purposes only and does not constitute specific tax, legal, investment, or financial advice. The information provided is derived from sources believed to be reliable and is based on current tax laws and regulations as of the date of publication, which are subject to change. Aegis Wealth Management, LLC is not a law firm or accounting firm and does not give legal, accounting, or tax advice. Readers should consult with a qualified legal and/or tax professional to understand how these laws and regulations may apply to their unique circumstances. This material is not intended to be relied upon to avoid tax penalties under U.S. federal tax law. Past performance does not guarantee future results. All investing involves risk, including risk of loss.