S&P 500 Returns Exposed

Quote

“You are going to be old one day. Might as well be old and rich.” - TheWealthCoach

S&P 500 Returns Exposed

Everyone and their mom preaches about investing the S&P 500 (myself included).

The topic that always seems to come back up and be debated is what return you can actually expect to earn by investing in S&P 500 funds like VOO and SPY.

To make things easy, I pulled a little bit of data and tossed it into a set of tables.

So lets ditch the opinions. Here is what the numbers show 🤝 

History Of Returns

Each table below shows the start and end month, total return, and annualized return with and without dividends reinvested.

My word of advice is to focus on the row highlighted in green. This shows the annual average return with dividends reinvested for each time frame.

(hint hint yes you should be reinvesting dividends).

10 Year Data

Yes, the last decade has been one for the books.

20 Year Data

Thought this would be significantly lower since it includes the 2008 crash, but still very respectable.

50 Year Data

Stretching it back over the last 50 years, I’m a fan.

Since Inception

Last but not least for the boomers, here is the return since the S&P 500 was created in 1957. Those return numbers are wild.

As you can see the common return numbers of 10% annually (not adjusted for inflation) or 8% annually (adjusted for inflation) are in the ballpark.

It never hurts to be conservative though and assume these might be a little less when creating your investment strategy. Note that these are averages over long periods of time (don’t expect the market to return exactly 8% every year…you will be an emotional wreck).

In case you are curious, all of this data was pulled using a S&P 500 return calculator that you can access by clicking here.

Conclusion

It might sound blunt…but past performance does not guarantee future results. Economies across the globe have evolved, and no one can guarantee the next 50 years are going to match the last.

I’m not trying to sounds like a downer, it’s simply a risk us investors accept.

Another thing to remember when viewing “return” statistics. Any argument can be proven correct by choosing the right time frame. This goes not only for the S&P 500 but for any other investment you might make in the future (yes crypto bros I’m talking to you).

Hopefully this gave you an idea of what returns you can actually expect long term from the S&P 500.

I don’t know about you, but I think I’ll go buy me some VOO now…

Till the next one - Cade ✌️ 

Cade's Find

Meme Stocks Are Back!: You thought it was over…but Roaring Kitty has risen and hedge funds are trembling in their boots. Here is a good video summarizing the meme stock King’s return.

Gas Station Pizza and Geo Locator: Another episode from one of my favorite podcasts My First Million. Sam and Shaun discuss everything from gas station pizza doing millions, to how Geo locator blew up into a world famous game.

Best Memes

The single tweet that sent GME up hundreds of percent this week…and “Roaring Kitty” hasn’t stopped posting meme videos since.

Not a meme, but worth a chuckle.

To bring you back down to Earth with all the excitement…

Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email don’t hesitate to send me a reply.