Historical S&P 500 Return
According to Scott Snider with www.mellenmoney.com, approximately 10% is the average return for the S&P 500 since its inception back in 1928. Adjusted for inflation the “real return” is more like 7%. Also worth noting that nearly half of the gains from the S&P 500 resulted from dividends.
The 2017 S&P 500 Return: Buy, Hold and Reinvest
The above quoted numbers are accurate if you bought the index at the opening price on January 3rd, 2017 and sold at the closing price on December 29, 2017. If you’d prefer the numbers buying at the December 30, 2016 closing price the return would be +19.42% and +21.83%, respectively.
Here are the index price returns:
|Price Return From
|Jan 3, 2017 Start||2251.57||2673.61||18.74%|
|Dec 30, 2016 End||2238.83||2673.61||19.42%|
Following are the dividend reinvested returns:
|Dividend Reinvested Return From
|Jan 3, 2017 Start||4303.12||5212.76||21.14%|
|Dec 30, 2016 End||4278.66||5212.76||21.83%|
Whichever set of return time-spans you prefer, the message is the same “If you invest in funds or stocks that pay a dividend you’ll have to choose what to do with the payouts. Simply quoting price returns without regard to real returns in cash form doesn’t reveal the true impact of an investment.” Either way, 2017 was a very good year for stocks with gains doubling histroical returns.
Source on the 2017 S&P 500 Return Calculations
These numbers come from S&P Dow Jones Indices, the owner of the S&P 500 Index. They have both the classic S&P 500 price index as well as the dividend reinvested numbers from 1987 forward.
2018 S&P 500 Return Projections
According to UBS, the S&P 500 could surge 18 percent this year, which raised its 2018 target to 3,150, the highest on Wall Street, only three trading days into the year. The Dow Jones industrial average already crossed 25,000
The S&P 500’s gain on the year will be 17.8 percent according to the new UBS target and based on the benchmark’s closing value of 2017. Taking into account the rally to start 2018, the index will rise 15.5 percent from here, according to the UBS target. The firm’s previous 2018 forecast for the S&P 500 was 2,900.
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