Average S&P 500 return

Over the last 10 years the S&P 500 has returned an average of +15.2% per year with dividends reinvested — +13.4% from price alone, and +11.6% after inflation. Since 1994 the annualized figure is +10.6%. Every standard window, through Sep 8, 2026:

Annualized (CAGR) from SPY daily closes at exact anniversary dates; inflation adjustment uses CPI (CPIAUCSL). The dividends column is the reinvested-dividend contribution — total return minus price return.

The years behind the average#

“Average” hides how lumpy the ride is: across 32 full calendar years, the market finished positive 78% of the time, with a best year of +37.3% (1995) and a worst of -36.8% (2008). The arithmetic mean of single years is +12.1% and the median +15.8% — but compounding through the crashes brings the realized annualized return to +10.6%. Almost no individual year lands near the average.

Where the returns came from#

Every dollar of long-run return traces to three sources: dividends you collect and reinvest, growth in the earnings behind the index, and the change in what investors will pay for those earnings (the P/E multiple). The identity is exact — price is earnings times the multiple — so these three components multiply out to the total. Inflation splits that earnings growth again — part of it is real, part is just prices rising — so the full identity has four terms. Over the last 150 years the S&P 500 returned +9.6% a year in nominal terms: +4.2% from dividends, +2.2% from real earnings growth, +0.6% from the multiple (which drifted from 12.3× to 29.2×), and +2.3% from inflation. Strip inflation out and the real return is +7.1% a year — dividends and real business growth do the work; the multiple contributes almost nothing over a long horizon.

Computed on Shiller monthly index data through Sep 2026 — index price, as-reported trailing earnings (extended past the source's reporting lag by our own aggregate of constituent earnings from SEC filings) and the total-return index, with inflation from Shiller's CPI (chained to FRED past its lag). Month-end endpoints, so totals differ slightly from the daily table above. The four components multiply out to the nominal total exactly — bar widths are their log contributions, so each segment's share is honest. Over one- and three-year windows earnings are volatile and the multiple dominates, which is the point: short-run returns are mostly re-pricing, long-run returns are mostly dividends and real business growth.