The Bumpy Road to the Market’s Long-Term Average

S&P 500 Index Annual Returns 1926-2020

Past performance is no guarantee of future results. Actual returns may be lower. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strat- egy will be successful. Indices are not available for direct investment. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. In US dollars. S&P data © 2021 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Dimensional Fund Advisors LP is an investment advisor regis- tered with the Securities and Exchange Commission

Nowhere Near the Average

Stocks can reward investors who maintain a long- term outlook. But inconsistent short-term perfor- mance may test one’s commitment to a long-term strategy.

Since 1926, the US stock market has rewarded in- vestors with an average annual return of about 10%. But it’s important to remember that returns in any given year may be sky-high, extremely poor, or somewhere in between. The numbers to the right ex- emplify this.

• Annual returns came within two percentage points of the market’s long-term average of 10% in just six of the past 95 years.

• Yearly returns have ranged as high as up 54% and as low as down 43%.

• Since 1926, annual returns have been positive 70 times and negative 25 times.

Understanding the range of potential outcomes can help you stick with a plan and ride out the inevitable ups and downs.