We ran some numbers over the weekend, comparing the long-term returns for various stock markets. The table below shows how the S&P500 has substantially under-performed many other markets on a one, five, and even 10-year horizon. Yet interestingly, despite the market downturn, whereby we are still well below the S&P500’s all-time high, the 20- and 30-year S&P performance hasn’t been all too bad.
The S&P500 has delivered 8% compound annual returns over 20 years, and 11% over 30. Thus if America’s best days are truly ahead, the S&P500 could revert to delivering the kind of returns it has over the long-term.
The chart below calculates the S&P500 return inclusive of dividends. The comparison isn’t perfectly fair since some of the other indexes don’t include dividends, or have short histories due to our difficulty accessing data, even with Bloomberg. For the broader point this isn’t important though — the S&P500 has underperformed during the last 10 years, yet has still delivered reasonable returns on a longer time-line.
Data pulled from Bloomberg. (FTSE – The U.K., TOPIX – Japan, Hang Seng – Hong Kong, Sensex – India, SET – Thailand)