Friday, July 03, 2009

Historical Annual Returns for the S&P 500 Index - Updated Through 2008

Last November I posted charts of historical annual returns for the S&P 500 and its precursor S&P 90 Index from January 1926 - November 2008. Some people have been emailing me to ask me to update the charts with full year returns for 2008. Updated charts are shown in the two images below (click on each image for a larger view).

As shown below, 2008 was an awful year for the S&P 500 Index and was the second worst annual return since 1926. The only year with a worse performance was 1934, during the midst of the Great Depression, when the index dropped about 43.34%.

The 5-year annualized return through the end of 2008 was -2.19%, the worst it has been since 1941, during World War II, when the annualized 5-year return was about -7.51%. The 10-year annualized return of about -1.39% was the worst it has ever been based on the data I have back through 1926!

The S&P 500 Index is up slightly through the first six months of 2009. I'm uncertain as to whether the stock market has finally stabilized. The current U.S. recession is worsening and if things continue to get much worse, it wouldn't surprise me to see the S&P 500 Index breach the lows it reached back in March 2009.

I have posted an updated chart for the returns of the S&P 500 Index during the period between 1926-2015.