Historical S&P 500 Returns

The index is focused on large-cap, U.S. companies. Here's how it got started, and how it has performed over time
Author:
Updated:
Original:

Many consider the annual returns of the S&P 500 index to be the benchmark by which investors should measure their success. If you underperform the S&P, you have missed out on the simple gains you would have made by a diversified index approach. If, however, you can achieve gains that are higher than the S&P 500, you’re creating value that otherwise might be missed.

Exactly what kind of performance does it take to “beat the market”?

History of the S&P 500 Index

The index’s origins trace back to 1926 when the Standard Statistics Company (which later merged with Poor’s Publishing to become Standard & Poor’s) created a 90-stock index.

In 1956, the index developed into a broader attempt to gauge the economy; incorporating 500 companies based on several criteria. The attempt here is to follow large cap businesses that also offer enough liquidity that they can be invested in, so market capitalization and volume are factors.

To be clear, it’s an index focused on America. The companies are primarily operating in the U.S., and file here. Managed by a committee at Standard & Poor’s, the final say comes down to that group.

The S&P 500 Change, Year by Year:

YearYear OpenYear HighYear LowYear CloseAnnual % Change

2019

2510.03

3240.02

2447.89

3230.78

28.88%

2018

2695.81

2930.75

2351.10

2506.85

-6.24%

2017

2257.83

2690.16

2257.83

2673.61

19.42%

2016

2012.66

2271.72

1829.08

2238.83

9.54%

2015

2058.20

2130.82

1867.61

2043.94

-0.73%

2014

1831.98

2,090.57

1,741.89

2,058.90

11.39%

2013

1,462.42

1,848.36

1,457.15

1,848.36

29.60%

2012

1,277.06

1,465.77

1,277.06

1,426.19

13.41%

2011

1,271.87

1,363.61

1,099.23

1,257.60

0.00%

2010

1,132.99

1,259.78

1,022.58

1,257.64

12.78%

2009

931.8

1,127.78

676.53

1,115.10

23.45%

2008

1447.16

1447.16

752.44

903.25

-38.49%

2007

1,416.60

1,565.15

1,374.12

1,468.36

3.53%

2006

1,268.80

1,427.09

1,223.69

1,418.30

13.62%

2005

1,202.08

1,272.74

1,137.50

1,248.29

3.00%

2004

1,108.48

1,213.55

1,063.23

1,211.92

8.99%

2003

909.03

1,111.92

800.73

1,111.92

26.38%

2002

1,154.67

1,172.51

776.76

879.82

-23.37%

2001

1283.27

1373.73

965.80

1148.08

-13.04%

2000

1455.22

1527.46

1264.74

1320.28

-10.14%

1999

1228.10

1469.25

1212.19

1469.25

19.53%

1998

975.04

1241.81

927.69

1229.23

26.67%

1997

737.01

983.79

737.01

970.43

31.01%

1996

620.73

757.03

598.48

740.74

20.26%

1995

459.11

621.69

459.11

615.93

34.11%

1994

465.44

482.00

438.92

459.27

-1.54%

1993

435.38

470.94

429.05

466.45

7.06%

1992

417.26

441.28

394.50

435.71

4.46%

1991

326.45

417.09

311.49

417.09

26.31%

1990

359.69

368.95

295.46

330.22

-6.56%

1989

275.31

359.80

275.31

353.40

27.25%

1988

255.94

283.66

242.63

277.72

12.40%

1987

246.45

336.77

223.92

247.08

2.03%

1986

209.59

254.00

203.49

242.17

14.62%

1985

165.37 

212.02

163.68

211.28

26.33%

1984

164.04

170.41

147.82

167.24

1.40%

1983

138.34

172.65

138.34

164.93

17.27%

1982

122.74

143.02

102.42

140.64

14.76%

1981

136.34

138.12

112.77

122.55

-9.73%

1980

105.76

140.52

98.22

135.76

25.77%

1979

96.73

111.27

96.13

107.94

12.31%

1978

93.82

106.99

86.90 

96.11

1.06%

1977

107.00

107.00

90.71

95.10

-11.50%

1976

90.90

107.83

90.90

107.46

19.15%

1975

70.23

95.61

70.04

90.19

31.55%

1974

97.68

99.80

62.28

68.56

-29.72%

1973

119.10

120.24

92.16

97.55

-17.37%

1972

101.67

119.12

101.67

118.05

15.63%

1971

91.15

104.77

90.16

102.09

10.79%

1970

93.00

93.46

69.29

92.15

0.10%

1969

103.93

106.16

89.20

92.06 

-11.36%

1968

96.11

108.37

87.72

103.86

7.66%

1967

80.38

97.59

80.38

96.47

20.09%

1966

92.18

94.06

73.20

80.33

-13.09%

1965

84.23

92.63

81.60

92.43

9.06%

1964

75.43

86.28

75.43

84.75

12.97%

1963

62.69

75.02

62.69

75.02

18.89%

1962

70.96

71.13

52.32

63.10

-11.81%

1961

57.57

72.64

57.57

71.55

23.13%

1960

59.91

60.39

52.20

58.11

-2.97%

1959

55.44

60.71

53.58

59.89

8.48%

1958

40.33

55.21

40.33

55.21

38.06%

1957

46.20

49.13

38.98

39.99

-14.31%

1956

45.16

49.64

43.11

46.67

2.62%

1955

36.75

46.41

34.58

45.48

26.40%

1954

24.95

35.98

24.80

35.98

45.02%

1953

26.54

26.66

22.71

24.81

-6.62%

1952

23.80

26.59

23.09

26.57

11.78%

1951

20.77

23.85

20.69

23.77

16.46%

1950

16.66

20.43

16.65

20.41

21.78%

1949

14.95

16.79

13.55

16.76

10.26%

1948

15.34

17.06

13.84

15.20

-0.65%

1947

15.20

16.20

13.71

15.30

0.00%

1946

17.25

19.25

14.12

15.30

-11.87%

1945

13.33

17.68

13.21

17.36

30.72%

1944

11.66

13.29

11.56

13.28

13.80%

1943

9.84

12.64

9.84

11.67

19.45%

1942

8.89

9.77

7.47

9.77

12.43%

1941

10.48

10.86

8.37

8.69

-17.86%

1940

12.63

12.77 

8.99

10.58

-15.29%

1939

13.08

13.23

10.18

12.49

-5.45%

1938

10.52

13.91

8.50

13.21

25.21%

1937

17.02

18.68

10.17

10.55

-38.59%

1936

13.40

17.69

13.40

17.18

27.92%

1935

9.51

13.46

8.06

13.43

41.37%

1934

10.11

11.82

8.36

9.50

-5.94%

1933

6.83

12.20

5.53

10.10

46.59%

1932

7.82

9.31

4.40

6.89

 -15.15%

1931

15.85 

18.17

7.72

8.12

-47.07%

1930

21.18

25.92

14.44

15.34

-28.48%

1929

24.81

31.86

17.66

21.45

-11.91%

1928

17.76

24.35

16.95

24.35

37.88%

Returns Through Time

How you gauge the S&P as a benchmark depends on your timeline. If you consider that the index became what it is today in 1956 when the number of companies increased to 500, it’s probably more conducive to look at what the index has done since then. From 1956 to 2019, that return has been around 8%.

In more recent years, we’ve seen the average gains per year increase. Many attributes, such as higher stock valuations, and more prevalent use of low interest rates and liquidity, are seemingly contributing factors. Some years vastly outpace the average. In 2019, the S&P 500 experienced a 28.8% increase over the course of the year. These gains were brutally wiped out in a very short period of time, thanks to the coronavirus outbreak, leading to some broad shifts in valuations for stocks.

One of the easiest ways to attempt to have direct investment in the S&P 500, or understand your investment performance against its benchmark, is through the use of a fund that attempts to track it. The most popular is likely the SPDR S&P 500 ETF Trust  (SPY) - Get Report . Over the last 10 years this ETF has brought in an average return of 10.43%. For a primarily domestic investor, it often pays to compare one's portfolio performance to this fund, and ask yourself whether you’d be better off simply owning it.

Passive investors largely look to track indexes like the S&P 500; believing it more and more difficult to outperform the market. Active investors, such as many hedge funds, look to outperform indexes like the S&P 500.

Moving Forward

Looking ahead, it’s very tough to attempt to forecast where things are heading over the next year. The economic impact of this coronavirus pandemic is incredibly difficult to truly gauge at this point. The market corrected well ahead of the data, and we’re now getting the numbers in from first quarter earnings. Pain in the second quarter seems likely to be much worse, as the prolonged shutdowns across the country have made it difficult to do business across most industries. Retail has seen a huge barrier to driving store traffic, with many companies temporarily closing their stores down entirely. Even with stimulus, the effect of those layoffs and downtime seems likely to be a lingering impetus to a bull market. Couple in what we’re seeing with energy prices, and it seems likely that we’ll see some bankruptcies or at the very least large layoffs in that industry through the year.

The impact of events and market declines such as this are the attributes that impact the S&P 500’s average through time. For every seemingly meteoric rise in the market, there tends to be a counter lever that brings us back to earth.