By just about all accounts, investors have been spoiled over the last ten years as the S&P 500 has rallied more than 13% on an annualized basis.  However, when you compare returns for the market over the last one, two, five, ten, and twenty years, current returns are hardly at any sort of historical extreme.  The chart below compares the S&P 500’s annualized performance on a total return basis to the average annualized return for all similar time frames.  Looking just at the last year (through 9/30), the S&P 500’s total return is 4.3%, which is less than half of the historical average one year total return of 11.7%.  Looking at two and five-year annualized performance figures, current returns are just modestly above their historical average.  While the ten-year annualized return is almost three percentage points above the historical average, the current 20-year annualized gain of 6.3% is well below the S&P 500’s historical average of 11.0%.

When we compare current returns to all other periods in terms of the percentile rank, they’re even less impressive. Over the last year, the S&P 500’s current one-year gain only ranks in the 31st percentile compared to all other periods.  Over the two and five year periods, current returns are just under the 50th percentile compared to all other two and five year periods, and for the ten-year time period, which is the best relative to average of the five time frames shown, current returns are only in the 61st percentile.  Where performance really looks pathetic, though, is the 20-year window.  The S&P 500’s current annualized return of 6.3% only ranks in the 5th percentile, meaning that 95% of all other 20-year periods have been better than the current 20-year window. Start a two-week free trial to Bespoke Institutional for full access to our research and market analysis.