Wall Street Online

Over the last 30 years, the S&P 500 has generally outperformed most other major asset classes, delivering strong average annual returns, although with notable volatility.

Key points on performance:

• The S&P 500 has delivered approximately a 9% average annual return over the last 30 years, with inflation-adjusted returns around 6.3%. This return reflects dividends reinvested and price appreciation combined.
• Compared to other asset classes over similar periods, the S&P 500's returns have typically surpassed those of U.S. bonds, cash, and real estate. The U.S. housing market, for example, averaged about 5.5% annual growth over recent decades, which is less than the stock market returns.
• Certain alternative assets like real estate investment trusts (REITs) and gold have at times outperformed the S&P 500 from about 1999 through the early 2020s. Some REITs showed total returns in the mid-teens percentage annually, slightly beating the S&P 500’s roughly 13% total return in that timeframe.
• Over a longer historical context since 1928, stocks as represented by the S&P 500 have delivered average returns near 10%, compared to bonds averaging around 4.5%, cash about 3.3%, and real estate approximately 4.2% annually.
• The S&P 500 has endured significant ups and downs including bear markets, recessions, and financial crises during this 30-year span. Despite this, a hypothetical $100 invested 30 years ago in the S&P 500 would have grown substantially more than comparable investments in bonds, real estate, or cash, especially when dividends are reinvested and considering compound growth.

In summary, over the last 30 years, the S&P 500 has been the leading performer versus other major asset classes like bonds, real estate, cash, and gold in most periods, although certain segments like REITs and gold have occasionally outpaced it. Its average annual return around 9% to 10% (nominal) stands out when compared with the typical single-digit returns of alternative investments.