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Opinion
Nir Kaissar

Don’t Expect the Roaring ’10s for Stocks to Repeat in the ’20s

The rally has been based on record growth in earnings, which have historically been incredibly volatile.    

The party can’t last forever.

The party can’t last forever.

Photographer: Brian Harkin/Getty Images

As the 2010s come to a close, it’s safe to say that the decade has been an enchanted one for U.S. stocks. The hard question is what lies in the decade ahead, and the data suggests that investors shouldn’t expect a repeat performance. 

When the U.S. narrowly averted an economic meltdown at the end of the last decade, few anticipated that the following one would feature a historic rally for U.S. stocks. The S&P 500 Index has returned 13% a year from 2010 through November, including dividends, easily outpacing its long-term annual return of roughly 9%. It’s also the market’s fifth best decade since 1880. Only the 1920s, 1950s, 1980s and 1990s produced higher returns.