The 1980s and 1990s bull market was an all-timer, perhaps the greatest of all-time for U.S. stocks.1
The S&P 500 was up nearly 18% per year for two decades straight.2
The bull market of the 2010s and 2020s hasn’t reached those heights but we’ve still seen above-average double-digit annual returns in both decades.
Here are the annual returns in each of the past five decades:
We’ve still got a few more years in the 2020s but this is starting to look like a mini-1980s/1990s back-to-back boom.
We’re on the verge of our fourth amazing decade of returns in the past five. The 2000s lost decade sticks out like a sore thumb but the others have more than made up for it.
The S&P 500 is now up:
+12.1% per year since 1980
+10.6% per year since 1990
+7.8% per year since 2000
+13.9% per year since 2010
Your starting point could change the way you feel about the stock market but most people buy across time, not all at once.
It’s also worth pointing out how unlikely this run since 2010 has been given the negative sentiment coming out of the Great Financial Crisis.
In the early-2010s I attended a lot of institutional investor conferences. All of the endowments and foundations were investing from the fetal position.
Everyone wanted hedge funds and Black Swan funds. All of the expert predictions were to expect lower-than-average returns in the new normal going forward.
No one predicted this. No one. Not even close.
That’s a good lesson for what comes next from here.
No one knows.
Further Reading: 31 Years of Stock Market Returns
1The bottom of WWII through the early-1960s wasn’t bad either — 15.5% annual returns from 1942 to 1965.
2That’s 17.3% returns for the 1980s and 18.0% returns for the 1990s.
