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No one can accurately forecast what returns for the stock or bond market will be. But we do know how the markets have returned in the past, under many different political and economic environments.
The following table shows the annual returns of the S&P 500, the 10-year US Treasury bond (representing the bond market), the 3-month Treasury bill, and the inflation rate. We use the 3-month Treasury bill as a representation for cash returns because many banks buy them for short term investment yields.
The inflation rate is important because every investor, large or small, needs to earn more than inflation to keep their spending power stable.
At the bottom of the table is listed annualized returns for each asset class over 5-years, 10-years, 20-years, 50-years and the full 91-years. Any given year can be very volatile and this shows why it is important to stay invested to smooth out that fluctuation.
Historical Market Returns
| Stocks | Bonds | Cash | Inflation | ||
| Year | S&P 500 | 10 year Treasury | 3 mos T-Bill |
Consumer Price Index | Historical Events and Recessions |
| 2018 | -4.2% | 2.4% | 0.1% | 1.9% | Corporate tax cut passed in Congress and trade war escalates. Unemployment hits historic low. |
| 2017 | 21.6% | 2.8% | 1.4% | 2.1% | GDP growth pick-up globally; bitcoin soars in value |
| 2016 | 11.8% | 0.7% | 0.5% | 2.1% | Presidential election, Trump wins; UK votes for Brexit |
| 2015 | 1.4% | 1.3% | 0.2% | 0.7% | Oil prices continue to decline due to oversupply, causing S&P500 earnings to decline; consumer spending slows |
| 2014 | 13.5% | 10.7% | 0.1% | 0.8% | Nearly 50% decline in oil prices, interest rates dropped as inflation expectations declined |
| 2013 | 32.1% | -9.1% | 0.1% | 1.5% |
Better economy caused 10 year Treasury bond yields to almost double, from 1.7% to 3% by year end. |
| 2012 | 15.9% | 3.0% | 0.1% | 1.7% | Presidential election, Obama wins |
| 2011 | 2.1% | 16.0% | 0.0% | 3.0% | In Europe, concern over EU breakup caused by Greece |
| 2010 | 14.8% | 8.5% | 0.1% | 1.5% | Quantitative Easing 2 (QE2) started by the Federal Reserve to boost economic growth; Deepwater Horizon disaster |
| 2009 | 25.9% | -11.1% | 0.1% | 2.7% | Recession ends June |
| 2008 | -36.6% | 20.1% | 1.6% | 0.1% | Recession; Presidential election, Obama wins; Global Financial Crisis; Oil prices reach $148 per barrel |
| 2007 | 5.5% | 10.2% | 4.6% | 4.1% | Recession starts December |
| 2006 | 15.6% | 2.0% | 4.7% | 2.5% | Google buys YouTube for $1.65 billion; 12 coal miners die in Sago Mine disaster in West Virginia |
| 2005 | 4.8% | 2.9% | 3.0% | 3.4% | Hurricane Katrina hits the Gulf Coast; terrorist bombing on London transport system |
| 2004 | 10.7% | 4.5% | 1.2% | 3.3% | Presidential election, Bush wins |
| 2003 | 28.4% | 0.4% | 1.0% | 1.9% | US invasion of Iraq |
| 2002 | -22.0% | 15.1% | 1.7% | 2.4% | Recession; US military action in Afghanistan |
| 2001 | -11.8% | 5.6% | 3.7% | 1.6% | Recession March-November; 09/11 attacks |
| 2000 | -9.0% | 16.7% | 5.8% | 3.4% | Presidential election, Bush wins; Peak this year in the stock market in March 2000 |
| 1999 | 20.9% | -8.3% | 4.5% | 2.7% | Tech bubble; Glass-Steagall Act repealed |
| 1998 | 28.3% | 14.9% | 4.7% | 1.6% | Tech bubble; Clinton impeachment by the House of Representatives; failure of hedge fund, Long-Term Capital Management |
| 1997 | 33.1% | 9.9% | 5.1% | 1.7% | Tech bubble |
| 1996 | 22.7% | 1.4% | 5.0% | 3.3% | Presidential election, Clinton wins; Federal Reserve Chairman Greenspan calls stock market climb "irrational exuberance" |
| 1995 | 37.2% | 23.5% | 5.5% | 2.5% | Oklahoma City bombing; end of Balkams War; OJ Simpson found innocent, sarin nerve gas attack in Japan |
| 1994 | 1.3% | -8.0% | 4.0% | 2.7% | Russian bond default; global bond rates spike |
| 1993 | 10.0% | 14.2% | 3.0% | 2.7% | NAFTA signed into law; Maastrict Treaty signed, creating the European Union |
| 1992 | 7.5% | 9.4% | 3.4% | 2.9% | Presidential election, Clinton wins |
| 1991 | 30.2% | 15.0% | 5.6% | 3.1% | Recession ends March |
| 1990 | -3.1% | 6.2% | 7.6% | 6.1% | Recession starts July; first Gulf War |
| 1989 | 31.5% | 17.7% | 8.1% | 4.6% | Savings & Loan crisis and housing bust in the Northeast, Florida, Texas; Japan's stock market peaked at a P/E over 70 times |
| 1988 | 16.5% | 8.2% | 6.5% | 4.4% | Presidential election, Bush wins |
| 1987 | 5.8% | -5.0% | 5.7% | 4.4% | Stock market crash in October, biggest one-day percentage drop in the Dow Jones Industrial Average |
| 1986 | 18.5% | 24.3% | 6.0% | 1.1% | Chernobyl accident, Challenger Shuttle explodes in flight; US tax reform passes Congress |
| 1985 | 31.2% | 25.7% | 7.5% | 3.8% | Mexico City earthquake kills more than 9,000; Gorbachev becomes new leader of USSR |
| 1984 | 6.1% | 13.7% | 9.6% | 3.9% | Presidential election, Reagan wins |
| 1983 | 22.3% | 3.2% | 8.4% | 3.8% | US invades Grenada; US Embassy bombed in Beirut; first commercial mobile phones sold by Motorola |
| 1982 | 20.4% | 32.8% | 11.0% | 3.8% | Recession ends November; AT&T ordered to break-up; Argentina invades Falkland Islands |
| 1981 | -4.7% | 8.2% | 14.3% | 8.9% | Recession starts July; Federal Reserve pushes short term interest rate above 20%; unemployment hits 10% |
| 1980 | 31.7% | -3.0% | 11.2% | 12.5% | Presidential election, Reagan wins; Federal Reserve raising interest rates to halt high inflation; Recession January-July |
| 1979 | 18.5% | 0.7% | 9.9% | 13.3% | Iranian Revolution and holding American hostages |
| 1978 | 6.5% | -0.8% | 6.9% | 9.0% | Egypt and Israel sign Camp David Accords; first IVF baby born; US dollar drops vs European currencies as trade deficit grows |
| 1977 | -7.0% | 1.3% | 5.1% | 6.7% | New York City blackout for 25 hours; Alaskan Oil Pipeline opened; inflation at 6.5% |
| 1976 | 23.8% | 16.0% | 5.0% | 4.9% | Presidential election, Carter wins |
| 1975 | 37.0% | 3.6% | 6.0% | 6.9% | Recession ends March |
| 1974 | -25.9% | 2.0% | 7.8% | 12.3% | Recession; President Nixon resigns |
| 1973 | -14.3% | 3.7% | 6.7% | 8.7% | Recession starts November; Middle East Oil Embargo |
| 1972 | 18.8% | 2.8% | 4.0% | 3.4% | Presidential election, Nixon wins |
| 1971 | 14.2% | 9.8% | 4.5% | 3.3% | Voting age lowered to 18 from 21; Nixon freezes wages and prices for 90 days and eliminates the gold standard for US dollar |
| 1970 | 3.6% | 16.8% | 6.7% | 5.6% | Recession ends November |
| 1969 | -8.2% | -5.0% | 6.6% | 6.2% | Recession starts December |
| 1968 | 10.8% | 3.3% | 5.3% | 4.7% | Presidential election; student protests and riots; Martin Luther King and Robert Kennedy assassinated |
| 1967 | 23.8% | -1.6% | 4.3% | 3.0% | Widespread teacher strikes for better pay in US; Yom Kippur War in Israel; race riots in Detroit, Newark & Cleveland |
| 1966 | -10.0% | 2.9% | 4.8% | 3.5% | Credit crunch in banking sector; US government spending accelerates for Vietnam; higher tax rates for corporations |
| 1965 | 12.4% | 0.7% | 3.9% | 1.9% | Vietnam war escalates; race riots in Watts, California; Voting Rights Act passes; power blackout in northeast US |
| 1964 | 16.4% | 3.7% | 3.5% | 1.0% | Presidential election, Johnson wins |
| 1963 | 22.6% | 1.7% | 3.1% | 1.6% | President Kennedy assassinated, Johnson sworn in as president |
| 1962 | -8.8% | 5.7% | 2.8% | 1.3% | Cuban Missile Crisis |
| 1961 | 26.6% | 2.1% | 2.3% | 0.7% | Recession ends February |
| 1960 | 0.3% | 11.6% | 3.0% | 1.4% | Presidential election, Kennedy wins; Recession starts April |
| 1959 | 12.1% | -2.6% | 3.3% | 1.7% | St. Lawrence Seaway completed; Alaska & Hawaii become states; Fidel Castro comes to power in Cuba |
| 1958 | 43.7% | -2.1% | 1.8% | 1.8% | Recession ends April |
| 1957 | -10.5% | 6.8% | 3.2% | 2.9% | Recession starts August; Soviet Union successfully launches Sputnik |
| 1956 | 7.4% | -2.3% | 2.6% | 3.0% | Presidential election, Eisenhower wins; Interstate Highway System authorized |
| 1955 | 32.6% | -1.3% | 1.7% | 0.4% | Dr. Jonas Salk's polio vaccine declared effective; Warsaw Pact created between USSR and Eastern bloc nations |
| 1954 | 52.6% | 3.3% | 1.0% | -0.7% | Recession ends May |
| 1953 | -1.2% | 4.1% | 1.9% | 0.7% | Recession starts July |
| 1952 | 18.2% | 2.3% | 1.7% | 0.8% | Presidential election, Eisenhower wins; Federal Reserve raised interest rates to hold back inflation |
| 1951 | 23.7% | -0.3% | 1.5% | 6.0% | First nuclear power plant to generate electricity built in Idaho; Iran nationalizes oil fields |
| 1950 | 30.8% | 0.4% | 1.2% | 5.9% | Korean War begins; Senator McCarthy starts persecution of communists; Diner's Club issues first credit cards |
| 1949 | 18.3% | 4.7% | 1.1% | -2.1% | Recession ends October |
| 1948 | 5.7% | 2.0% | 1.0% | 3.0% | Presidential election, Truman wins; Recession starts November |
| 1947 | 5.2% | 0.9% | 0.6% | 8.8% | Marshall Plan to rebuild Europe initiated; Britain nationalizes coal mines and railroads |
| 1946 | -8.4% | 3.1% | 0.4% | 18.1% | Roosevelt dies, Truman sworn in as president; wind down of war economy, shortages still prevail; UN created |
| 1945 | 35.8% | 3.8% | 0.4% | 2.2% | Recession February-October 1945; World War II ends |
| 1944 | 19.0% | 2.6% | 0.4% | 2.3% | Presidential election; Roosevelt wins |
| 1943 | 25.1% | 2.5% | 0.4% | 3.0% | Broad scale rationing started in the US due to war shortages; Italy surrenders to Allies |
| 1942 | 19.2% | 2.3% | 0.3% | 9.0% | War Bonds introduced; US economy ramps up for war production, gasoline rations started, draft age lowered to 18 from 21 |
| 1941 | -12.8% | -2.0% | 0.1% | 9.9% | Pearl Harbor, US enters World War II |
| 1940 | -10.7% | 5.4% | 0.0% | 0.7% | Presidential election, Roosevelt wins; Investment Act of 1940 approved to regulate investment products sold to the public |
| 1939 | -1.1% | 4.4% | 0.0% | 0.0% | World War II starts in Europe |
| 1938 | 29.3% | 4.2% | 0.1% | -2.8% | Federal Reserve raises rates, US Government slows spending to reduce deficit which puts squeeze on economy |
| 1937 | -35.3% | 1.4% | 0.3% | 2.9% | Recession May 1937-June 1938 |
| 1936 | 31.9% | 5.0% | 0.2% | 1.4% | Presidential election, Roosevelt wins |
| 1935 | 46.7% | 4.5% | 0.2% | 3.0% | Social Security Act signed into law; unemployment at 20%; Hoover Dam is completed; worst dust storms hit the US |
| 1934 | -1.2% | 8.0% | 0.3% | 1.5% | World economy hits low; Fascism, Nazism, and Communism movements grow; public works projects begin in the US |
| 1933 | 50.0% | 1.9% | 1.0% | 0.8% | Depression ends March; Glass-Steagall Act and Securities Act of 1933 regulate banks, require stock & bond financial disclosures |
| 1932 | -8.6% | 8.8% | 1.1% | -10.3% | Depression; Presidential election, Roosevelt wins |
| 1931 | -43.8% | -2.6% | 2.3% | -9.3% | Depression |
| 1930 | -25.1% | 4.5% | 4.6% | -6.4% | Depression |
| 1929 | -8.3% | 4.2% | 3.2% | 0.6% | October stock market crash |
| 1928 | 43.8% | 0.8% | 3.1% | -1.2% | Presidential election, Hoover wins; penicillin discovered; the UK makes the voting age the same for men and women |
| Stocks | Bonds | Cash | Inflation | Geometric Average | |
| 5 yr | 8.4% | 3.5% | 0.5% | 1.5% | 2014-2018 |
| 10 yr | 13.0% | 2.0% | 0.3% | 1.8% | 2009-2018 |
| 20 yr | 5.6% | 4.4% | 1.7% | 2.2% | 1999-2018 |
| 50 yr | 9.7% | 6.7% | 4.7% | 4.0% | 1969-2018 |
| 70 yr | 11.2% | 5.4% | 4.1% | 3.4% | 1949-2018 |
| 91 yr | 9.5% | 4.9% | 3.4% | 3.0% | 1928-2018 |
| Data source: NY University, Stern School of Business; US Bureau of Labor Statistics; Archer Bay Capital LLC |