Stock Market CAGR Returns: Average Annual Stock Market Returns In Last 30 Years

Stock Market is a place where anyone can buy or sell securities such as shares of a company’s stock. Each company’s stock price performance can be tracked individually by checking on Yahoo Finance or Google Finance (or your broker’s website or app). But, how do we represent the entire stock market and evaluate its performance? Let’s understand how we can analyze the Stock Market CAGR Returns.

Stock Market CAGR Returns: The Compound Annual Growth Rate of Stock Market

Apple Stock Price on Yahoo Finance

The Stock Market, in a way, can be represented by making a basket of multiple stocks and weighting them according to some metric such as the market cap or the stock price.

Luckily for us, there are 3 very popular indexes that can largely represent the stock market. These indexes are the S&P 500, Dow Jones Industrial Average, and Russell 2000.

30 Year Stock Market CAGR Returns Measured Via S&P 500

We have already talked about what S&P 500 is in this article.

The S&P 500 Index is an index composed of the 500 largest companies that are listed on the stock market in the United States.

The stocks in the S&P 500 Index are weighted proportional to the market capitalization of the stocks.

The acronym “S&P” represents “Standard and Poor’s”, which originated from the amalgamation of Henry Poor’s annual book, which listed publicly held railroad companies, with the Standard Statistics Company’s publications in 1941.

The S&P 500 Index came into being in 1957. The “500” in the S&P 500 index refers to the number of stocks that are included in the index.

Some of the main stocks that constitute the S&P 500 Index are Apple (AAPL), Microsoft (MSFT), Alphabet(GOOG), Amazon (AMZN), Nvidia (NVDA), Exxon (XOM), etc.

The S&P 500 Index is maintained by the S&P Dow Jones Indices, a division of S&P Global.
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30 Year Stock Market CAGR Returns Measured Via S&P 500

30 Year Stock Market Chart for S&P 500 Index [May 1993 – May 2023]

30 Year S&P 500 CAGR

From the stock price chart above, we note down the important data points:

Start Point: May 1993
End Point: May 2023
Time Period: 30 Years
Value of S&P 500 at Starting Point: 450.19
Value of S&P 500 at Ending Point: 4205.52

Now, we can use the online CAGR Calculator to calculate the CAGR return of S&P 500 for the last 30 years.

Based on our observation, the average annual S&P 500 return measured in the last 30 years is 7.73% per year.

30 Year Stock Market CAGR Returns Measured Via Dow Jones

We have already talked about what Dow Jones Industrial Average is in this article.

Dow Jones Industrial Average, commonly called ‘The Dow‘ on the news and among investors, is an equity index. There are 30 large-cap U.S. stocks that make up this Index. It is managed by S&P Dow Jones Indices, a division of S&P Global.

The Dow was created in the year 1896, and initially just had 12 stocks in it. It has evolved since then and today it contains 30 stocks.

The constituent stocks in the Dow are weighted in the Index by their stock price (rather than the market capitalization as in the case of the S&P 500 Index).

Even though the Dow Jones Industrial Average (which has just 30 stocks) doesn’t cover as many stocks as the S&P 500 Index (which has 500 stocks), it is still commonly used as a proxy for the entire stock market.

Many economists believe that the S&P 500 CAGR is a better representation of the stock market return than the Dow Jones CAGR, but Dow has been around for a longer time and it’s still very relevant.
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30 Year Stock Market CAGR Returns Measured Via Dow Jones

30 Year Stock Market Chart for Dow Jones Index [May 1993 – May 2023]

30 Year Dow Jones CAGR

From the stock price chart above, we note down the important data points:

Start Point: May 1993
End Point: May 2023
Time Period: 30 Years
Value of S&P 500 at Starting Point: 3527.43
Value of S&P 500 at Ending Point: 33042.78

Now, we can use the online CAGR Calculator to calculate the CAGR return of Dow Jones Industrial Average for the last 30 years.

Based on our observation, the average annual Dow Jones Industrial Average return measured in the last 30 years is 7.74% per year.

30 Year Stock Market CAGR Returns Measured Via Russell 2000

We have already talked about what Russell 2000 Index is in this article.

The Russell 2000 Index is an index composed of the 2000 small-cap companies that are listed on the stock market in the United States.

The stocks in the Russell 2000 Index are weighted proportional to the market capitalization of the stocks.

The Russell 2000 Index came into being in 1984, and it was introduced by the Frank Russell Company.

Some of the main stocks that constitute the Russell 2000 Index are Super Micro Computer (SMCI), Lattice Semiconductor (LSCC), Shockwave Medical (SWAV), Chesapeake Energy (CHK), Apellis Pharmaceuticals (APLS), Celsius (CELH), etc.

The Russell 2000 Index is maintained by FTSE Russell, a subsidiary of the London Stock Exchange Group.
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30 Year Stock Market CAGR Returns Measured Via Russell 2000

30 Year Stock Market Chart for Russell 2000 Index [May 1993 – May 2023]

30 Year Russell 2000 CAGR

From the stock price chart above, we note down the important data points:

Start Point: May 1993
End Point: May 2023
Time Period: 30 Years
Value of S&P 500 at Starting Point: 232.19
Value of S&P 500 at Ending Point: 1749.65

Now, we can use the online CAGR Calculator to calculate the CAGR return of Russell 2000 Index for the last 30 years.

Based on our observation, the average annual Russell 2000 return measured in the last 30 years is 6.96% per year.

30 Year Stock Market CAGR Returns Measured Via Nasdaq

We have already talked about what Nasdaq Composite Index is in this article.

The Nasdaq Composite Index is an index composed of more than 3000 companies that are listed on the Nasdaq Stock Market in the United States.

The stocks in the Nasdaq Composite Index are weighted proportional to the market capitalization of the stocks.

The Nasdaq Composite Index came into being in 1971, and it was introduced Nasdaq.

Some of the main stocks that constitute the Nasdaq Composite Index are Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Nvidia (NVDA), Tesla (TSLA), Alphabet (GOOG), Meta (META), etc.

The Nasdaq Composite Index is maintained by Nasdaq
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