The Distribution Of S&P 500 Returns

The recent streak of 20%+ annual gains has renewed debate around what investors should realistically expect from the S&P 500. Historically, the index most commonly delivers annual returns in the 10–20% range, with 34 years falling within that band since records began. Market declines, however, are far from rare. The S&P 500 has experienced returns between -10% and -20% in 18 different years, declines between -20% and -30% seven times, and a drop greater than -40% only once, during the 1931 Great Depression. While the stock market has historically trended higher over the long term, volatility and downturns are a normal part of investing. In fact, more than one-third of all calendar years have produced negative returns.