A 10% return on your investment would be a great way to stay financially stable.
The average stock market return is around 7%. This takes into account the periods of highs, such as the 1950s, when returns were as much as 16%. It also takes into account the negative 3% returns in the 2000s.
The last decade provided an average return of 6.88% in the stock market. The lower return takes into account the tremendous loss the market took in 2008.
Over the last 50 years, the stock market saw an average return of 10.09%.
The average investor greatly underperforms the stock market. Over the last 30 years, the average investor saw a return of 3.66%, whereas the S&P 500 had an average return of 6.73%.
According to Vanguard, over the next 10 years, investors can expect a 6.6% return on stocks in their retirement account. They can also anticipate a 3.1% return on bonds in their portfolio.
Mutual funds mimicking the S&P 500 make an average of 7-9% return.
Bonds provide an average return that is 1 of that of the stock market. Bonds usually provide a return of between 5 and 6%.
The average S&P 500 dividend yield remains around 2%.
The last 10 years have produced a rate of inflation around 1.6%. However, this year, inflation hit just over 2% in April and May.
On average, you can expect a 10% drop in the stock market at least once per year. A larger drop, around 20%, occurs every 31 years. Crashes, like we experienced in 2008 with more than a 30% drop, don't happen as often.