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List of Annual Returns With Dividends for the S&P 500
Here is a list of annual returns for the S&P 500 from 1995 to 2022:
| Year | Annual Returns |
|---|---|
| 1995 | 37.20% |
| 1996 | 22.68% |
| 1997 | 33.10% |
| 1998 | 28.34% |
| 1999 | 20.89% |
| 2000 | -9.03% |
| 2001 | -11.85% |
| 2002 | -21.97% |
| 2003 | 28.36% |
| 2004 | 10.74% |
| 2005 | 4.83% |
| 2006 | 15.61% |
| 2007 | 5.48% |
| 2008 | -36.55% |
| 2009 | 25.94% |
| 2010 | 14.82% |
| 2011 | 2.10% |
| 2012 | 15.89% |
| 2013 | 32.15% |
| 2014 | 13.52% |
| 2015 | 1.38% |
| 2016 | 11.77% |
| 2017 | 21.61% |
| 2018 | -4.23% |
| 2019 | 31.21% |
| 2020 | 18.02% |
| 2021 | 28.47% |
| 2022 | -18.01% |
Source: Aswath Damodaran, NYU Stern School of Business
Impact of Inflation and Market Timing on S&P 500 Returns
Many factors, including inflation and market timing, can influence an investor’s S&P 500 returns.
How Inflation Affects S&P 500 Returns
Inflation significantly impacts the historical average annual return of the S&P 500, which stands at approximately 6.29% when adjusted for inflation. However, the accuracy of this inflation-adjusted average is challenged, as it relies on data from the Consumer Price Index, believed by some analysts to understate the true inflation rate.
How Market Timing Affects S&P 500 Returns
The timing of entry into the market is crucial for S&P 500 investors. For example, the SPDR S&P 500 ETF Trust performed well for investors who bought between 1996 and 2000, but saw a consistent downward trend from 2000 to 2002. While timing plays a role in returns, predicting market lows and highs is difficult, advising against market timing, especially for new investors.
Investing in the S&P 500 Index
Investors cannot invest directly in the S&P 500 as it is an index, not an individual stock or fund. However, they can purchase stocks of S&P Global or invest in exchange-traded funds (ETFs) and index funds that mirror the index.
How to Invest In the S&P 500
To invest in the S&P 500, consider opening an account with a reputable brokerage firm like Vanguard, Fidelity, or Charles Schwab, and choose an ETF or index fund that tracks the S&P 500. Examples of these funds include SPDR S&P 500 ETF (SPY), iShares Core S&P 500 ETF (IVV), Vanguard S&P 500 ETF (VOO), and others.
Average Rate of Return for the S&P 500
The average annualized return for the S&P 500 over the last 20 years is 8.14%, while for the last 10 years, it is 12.74%.
Does the S&P 500 Return Include Dividends?
Standard S&P 500 returns do not include dividends, but a more comprehensive analysis, such as the list by Aswath Damodaran, accounts for dividends to provide a more accurate picture of returns over time.
The Bottom Line
The S&P 500 has a long-standing history of producing returns. While investing in funds tracking the index is not without risks, it offers a suitable choice for investors seeking long-term growth.
