However, the 9.2% gain was not achieved by the S&P 500 going up in a straight line.
On any given year, from 1950 to 2007, the S&P 500 had an annual average trading range of 24.26%. This means that on average, from a year to year basis, the range from the lowest to the highest S&P 500 index value has a range of 24.26%.
The least volatile year during this period was around 10%. The most volatile, around 49%.
The Future
Over the last four years, the annual trading range was 14.1% (2004), 11.75% (2005), 16.75% (2006), and 14.97% (2007). For the last four years, the volatility has been very much under average.
Over the next several years, we expect this volatility to increase after four years of below average volatility.
| Year | S&P 500 Start | Return | Annual Low | Annual High | Trading Range |
|---|---|---|---|---|---|
| 1950 | 16.66 | 22.63% | 0.00% | 22.63% | 22.63% |
| 1951 | 20.77 | 14.44% | -0.39% | 14.83% | 15.21% |
| 1952 | 23.8 | 11.64% | -2.98% | 11.72% | 14.71% |
| 1953 | 26.54 | -6.52% | -14.43% | 0.45% | 14.88% |
| 1954 | 24.95 | 44.21% | -0.60% | 44.21% | 44.81% |
| 1955 | 36.75 | 23.76% | -5.90% | 26.29% | 32.19% |
| 1956 | 45.16 | 3.34% | -4.54% | 9.92% | 14.46% |
| 1957 | 46.2 | -13.44% | -15.63% | 6.34% | 21.97% |
| 1958 | 39.99 | 38.06% | 0.00% | 38.06% | 38.06% |
| 1959 | 55.44 | 8.03% | -3.35% | 9.51% | 12.86% |
| 1960 | 59.91 | -3.00% | -12.87% | 0.80% | 13.67% |
| 1961 | 57.57 | 24.28% | 0.00% | 26.18% | 26.18% |
| 1962 | 70.96 | -11.08% | -27.64% | 1.41% | 29.04% |
| 1963 | 62.69 | 19.67% | -0.59% | 20.21% | 20.80% |
| 1964 | 75.43 | 12.36% | -0.81% | 15.07% | 15.88% |
| 1965 | 84.23 | 9.74% | -4.16% | 10.77% | 14.92% |
| 1966 | 92.18 | -12.86% | -21.59% | 2.76% | 24.34% |
| 1967 | 80.38 | 20.02% | -1.18% | 22.31% | 23.49% |
| 1968 | 96.11 | <8.06% | -9.76% | 13.80% | 23.56% |
| 1969 | 103.93 | -11.42% | -15.29% | 2.70% | 17.99% |
| 1970 | 93 | -0.91% | -26.23% | 1.34% | 27.57% |
| 1971 | 91.15 | 12.00% | -1.99% | 15.85% | 17.84% |
| 1972 | 101.67 | 16.11% | -0.79% | 17.82% | 18.61% |
| 1973 | 119.1 | -18.09% | -23.55% | 2.22% | 25.77% |
| 1974 | 97.68 | -29.81% | -37.59% | 3.45% | 41.04% |
| 1975 | 70.23 | 28.42% | -2.25% | 37.52% | 39.77% |
| 1976 | 90.9 | 18.22% | -1.20% | 19.60% | 20.80% |
| 1977 | 107 | -11.12% | -15.88% | 0.91% | 16.79% |
| 1978 | 93.82 | 2.44% | -7.86% | 15.17% | 23.02% |
| 1979 | 96.73 | 11.59% | -1.56% | 15.95% | 17.51% |
| 1980 | 105.76 | 28.37% | -10.90% | 34.23% | 45.13% |
| 1981 | 136.34 | -10.11% | -19.18% | 2.92% | 22.10% |
| 1982 | 122.74 | 14.58% | -16.73% | 17.61% | 34.35% |
| 1983 | 138.34 | 19.22% | -0.19% | 24.80% | 24.99% |
| 1984 | 164.04 | 1.95% | -10.23% | 3.88% | 14.11% |
| 1985 | 165.37 | 27.76% | -1.22% | 28.85% | 30.07% |
| 1986 | 209.59 | 15.54% | -3.34% | 21.60% | 24.94% |
| 1987 | 246.45 | 0.26% | -12.17% | 37.10% | 49.27% |
| 1988 | 255.94 | 8.51% | -6.16% | 10.94% | 17.11% |
| 1989 | 275.31 | 28.36% | -0.54% | 30.92% | 31.47% |
| 1990 | 359.69 | -8.19% | -18.12% | 2.81% | 20.93% |
| 1991 | 326.45 | 27.77% | -5.24% | 28.14% | 33.38% |
| 1992 | 417.26 | 4.42% | -5.96% | 6.08% | 12.04% |
| 1993 | 435.38 | 7.14% | -1.95% | 8.25% | 10.20% |
| 1994 | 465.44 | -0.92% | -6.36% | 3.74% | 10.10% |
| 1995 | 459.11 | 34.16% | -0.42% | 35.67% | 36.09% |
| 1996 | 620.73 | 19.33% | -3.78% | 22.78% | 26.55% |
| 1997 | 737.01 | 31.67% | -1.01% | 33.82% | 34.83% |
| 1998 | 975.04 | 26.07% | -6.38% | 27.68% | 34.06% |
| 1999 | 1228.1 | 19.64% | -1.84% | 19.95% | 21.79% |
| 2000 | 1455.22 | -9.27% | -13.82% | 6.71% | 20.53% |
| 2001 | 1283.27 | -10.53% | -26.38% | 7.80% | 34.18% |
| 2002 | 1154.67 | -23.80% | -33.43% | 1.93% | 35.36% |
| 2003 | 909.03 | 22.32% | -13.22% | 22.39% | 35.60% |
| 2004 | 1108.48 | 9.33% | -4.31% | 9.82% | 14.13% |
| 2005 | 1188.05 | 5.07% | -4.37% | 7.39% | 11.75% |
| 2006 | 1268.8 | 11.78% | -3.90% | 12.85% | 16.75% |
| 2007 | 1416.6 | 3.65% | -3.71% | 11.26% | 14.97% |
Average S&P 500 Annual Return (1950-2007) (excluding dividends): 9.22%
Average Annual Trading Range 24.26%
Trading Range Low 10.10%
Trading Range High 49.27%
S&P 500 PE Ratio, Dividend Yield, Total Annual Return (includes dividends)
4 comments:
Significant problem with this return data.
It shows only the "Capital Return", not the "Income Return" and "Total Return"
Total Return = Capital Return + Income Return.
For example, your charge shows a return of 3.49% for 2007, when in fact, this is only the "Capital" portion.
You have neglected to include the "Income return" of 1.89% for a total return for 2007 of 5.39%
Historically, the S&P 500 Total return has been 10.3%, not 9.2%.
This page:
http://rubyurl.com/KrQ4
Shows the Total Return historical of the S&P 500 index.
Good point.
The information above does not include dividend reinvestment.
The data I was using to determine was misleading in saying the adjusted close includes dividends and splits.
In any case, the information above is still useful as long as you know that dividends are not reinvested.
adam:
I created a new post which takes total return into consideration:
Historic S&P 500 PE Ratio, Dividend Yield and Annual Total Return
It was a great post. Though I'm still new in the business, I'm not yet that well educated about stocks but your article provided me insight also through other comment. Thanks for sharing it.
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