S&P 500 Returns by Decade
Direct answer: The S&P 500 has never had a negative total return over any full calendar decade. The best decade was the 1990s (+431% total, +18.2% annualized including dividends). The worst was the 2000s (the “lost decade,” -9.1% total, -0.95% annualized). The 2010s recovered strongly (+256% total, +13.6% annualized).
S&P 500 total return by decade
| Decade | Price Return | Total Return (with divs) | Annualized TR | Notable events |
|---|---|---|---|---|
| 1920s | +162% | ~+260% | ~+19% | Roaring Twenties bull market |
| 1930s | -42% | ~0% | ~0% | Great Depression; dividends offset price loss |
| 1940s | +35% | ~+99% | ~+7% | WWII; post-war recovery |
| 1950s | +486% | ~+490% | +19.4% | Post-war economic boom |
| 1960s | +54% | ~+112% | +7.8% | Vietnam era; rising rates late decade |
| 1970s | +17% | ~+77% | +5.9% | Stagflation; oil shocks |
| 1980s | +228% | ~+404% | +17.5% | Falling interest rates; Reagan bull market |
| 1990s | +316% | +431% | +18.2% | Tech boom; longest peacetime expansion |
| 2000s | -24% | -9.1% | -0.95% | Dot-com bust + financial crisis |
| 2010s | +190% | +256% | +13.6% | QE era; technology mega-cap dominance |
| 2020-2024 (partial) | +48% | ~+58% | ~+9.7% | COVID crash & recovery; rate shock 2022 |
Source: NYU Stern: S&P 500 Historical Returns. Last verified: September 2026.
Frequently asked questions
What caused the lost decade of 2000-2009?
The 2000s saw two major market crashes: (1) the dot-com bust (2000-2002) where technology stocks collapsed after the late 1990s bubble, and the S&P 500 fell 49% peak-to-trough; (2) the financial crisis (2007-2009) where housing collapse and credit crisis sent the S&P 500 down 57% peak-to-trough. The decade began at very high valuations (S&P 500 P/E was approximately 30x in early 2000) and ended after two devastating bear markets, leaving the price index down 24%. Dividends partially offset this, resulting in a small positive contribution from income.
Can another lost decade happen?
Yes. Long-run stock returns depend heavily on starting valuations. When the P/E ratio is very high at the start of a decade, subsequent returns tend to be lower. The S&P 500 entered 2000 at approximately 30x earnings; it entered 2025 at approximately 22-25x earnings, above historical average (15-17x) but not as extreme. Research (Shiller CAPE ratio) shows a meaningful negative correlation between starting valuation and subsequent 10-year returns. However, predicting the timing of valuation correction is very difficult; overvalued markets can remain overvalued for years.
Do dividends matter for long-term returns?
Yes, significantly. Since 1928, dividends have contributed approximately 40% of the S&P 500's total return. In the 1950s and 1960s, dividend yields were 4-6%, contributing substantially to total returns. Dividend yields have declined over decades (from 4% average in 1990s to approximately 1.3% in 2024) as companies shifted to share buybacks for capital return. In the lost decade of 2000-2009, dividends were the difference between a devastating total loss and a small positive return. Reinvesting dividends (automatically done in mutual funds/ETFs) is crucial for long-term wealth accumulation.