The S&P 500 is the most widely tracked stock market index in the world, representing the 500 largest publicly traded US companies. Here is a comprehensive look at its historical returns — the data every long-term investor should understand.
Key Statistics (1993–2024)
- Average annual return (price only): ~7.7%
- Average annual total return (with dividends): ~10.5%
- Best single year: 1995 (+34.1%)
- Worst single year: 2008 (−38.5%)
- Longest bull market: March 2009 – February 2020 (131 months)
- Worst decade: 2000–2009 (“Lost Decade”): −0.95% annualized price return
Returns by Decade
| Decade | Price Return (Annualized) | Total Return (w/ Dividends) |
|---|---|---|
| 1993–1999 | +18.5% | +21.1% |
| 2000–2009 | −0.95% | +0.4% |
| 2010–2019 | +11.2% | +13.6% |
| 2020–2024 | +14.8% | +15.9% |
The “Lost Decade” (2000–2009) is the strongest argument for consistent DCA over timing the market. An investor who put a lump sum in January 2000 at the dot-com peak saw near-zero returns for a decade. A DCA investor who kept investing through the dot-com crash (2000–2002) and GFC (2008–2009) would have a dramatically different — and positive — outcome.
The Three Major Crashes Since 1993
1. Dot-com Bust (2000–2002)
- Peak: March 2000 at ~1,553
- Trough: October 2002 at ~777
- Drawdown: −49.1%
- Recovery: ~7 years to full recovery
2. Global Financial Crisis (2008–2009)
- Peak: October 2007 at ~1,565
- Trough: March 2009 at ~676
- Drawdown: −56.8% (the worst since the Great Depression)
- Recovery: ~5.5 years to new highs
3. COVID-19 Crash (2020)
- Peak: February 19, 2020 at ~3,386
- Trough: March 23, 2020 at ~2,237
- Drawdown: −34%
- Recovery: ~5 months — the fastest recovery in S&P 500 history
What This Means for DCA Investors
The data reveals a counterintuitive truth: bear markets are gifts for DCA investors. During the GFC, an investor with a monthly DCA plan was buying S&P 500 at prices 40–57% below the previous peak. Those “discounted” shares generated enormous returns during the subsequent decade-long bull market.
The psychological challenge is staying the course. Most investors who abandoned their DCA plans during the GFC and reinvested after “the bottom was in” bought back in at far higher prices, severely damaging their long-term returns.
The Power of Staying Invested
J.P. Morgan’s annual “Guide to the Markets” has documented this consistently: an investor who missed just the 10 best trading days in the S&P 500 over a 20-year period would earn roughly half the return of one who stayed fully invested.
DCA doesn’t guarantee you capture every best day — but it ensures you’re always invested, which is the most important variable.
Projecting Forward
A common question: what should investors expect from the S&P 500 over the next 20 years?
There is no reliable answer. Market valuations (Shiller P/E, price-to-sales, etc.) suggest below-average returns may be more likely given historically high valuations. Counterarguments include structural factors like index fund inflows, AI-driven productivity growth, and global capital concentration in US equities.
The responsible answer: invest consistently, diversify globally, and do not bet your retirement on any single return assumption. Use our DCA Calculator to model scenarios at various return rates (5%, 7%, 10%) to stress-test your plan.
Disclaimer: Historical data is for educational purposes only. Past performance does not guarantee future results. This article does not constitute investment advice.