Let’s cut through the hype. Everyone loves saying “the stock market gives 10% a year.” And they’re not wrong… technically.
Over the last century, the S&P 500 has averaged around 10% per year.
However, here’s the truth. That promised 10% is just math. Investing in real life gets a lot messier, and a lot more interesting.
Let’s say you invested in the market and expected that clean 10% return every single year like clockwork. Hate to break it to you, but that’s not how this game works. That “average” hides some wild swings; some years the market flies up, other times it crashes harder than ever.
From 1926 to 2024, the market only hit that “average” 8–12% range eight times. Yes, out of nearly 100 years, most years the returns were way higher, or way lower. But somehow, the good news, even with the chaos, is that 70% of the time, the market finishes the year in the green.
Short-Term Chaos, Long-Term Calm
So, if you want to actually earn that 10%? Here’s some real deal to follow:
- Buy and hold.
- Don’t freak out.
- Keep your hands off your investments (mostly).
If you’re jumping in and out of the market trying to “time” it perfectly, you’re probably doing worse than just holding and chilling. Taxes and trading fees, on the other hand, will eat away all your returns.
The magic happens when you stay in the game for decades, not days. For example:
- 5-year return: 14.25%
- 10-year return: 12.21%
- 30-year return: 10.49%
(All measured as of end-2024 via the S&P 500)
But, dont forget inflation, the sneaky little villain in the background. With prices rising 2–3% a year, your 10% gets shaved down to 7–8% real value. It is still solid, but just not superhero-level.
Want to Play the Game Smarter?
Here’s your cheat sheet:
- When stocks are hot, stay cool.
Don’t get overconfident when the market’s booming—future returns might dip.
- When stocks fall, don’t flinch.
That’s actually your chance to buy low and set up for bigger future returns.
- Keep it boring. Seriously.
Do a little rebalancing here and there. But no drama, no panic. The less you touch it, the better it works.
If you can handle the rollercoaster and keep your hands and emotions inside the ride at all times, the stock market has your back. But don’t expect it to be smooth sailing.
So yeah, 10% average returns sounds simple. But the way to get there? That’s where the real stock market begins.
