Skip to content
Subscriber Only
Nicholas Colas

Low-Volatility Stock Returns Aren't the Long-Term Norm

The 20-year compounded average shows that U.S. equities are anything but stable.
The calm is deceptive.

The calm is deceptive.

Photographer: Michael Nagle/Bloomberg

The spectacular increase in U.S. equities in the second half of 2016 and in 2017 gave some investors more proof that stocks exhibit healthy double-digit returns over the long run. With enough patience, the theory goes, you can double your money every seven years or so.

History seems to support this optimism. According to data gathered by Aswath Damodaran of New York University, the average annual total return for the S&P 500 Index from 1928 through 2017 was 11.7 percent. A shorter time frame, 1968 through 2017, shows an 11.4 percent mean total return.