The S&P 500’s Decade Challenge

Market Blog

It’s the last day of the decade, so we thought we’d do our own “decade challenge” for the S&P 500 Index.

After all, it has been an unprecedented 10 years for financial markets. At the end of 2009, the S&P 500 was nine months into what would be the longest bull market on record. Since then, the benchmark has almost tripled, riding a wave of economic growth, improved earnings, muted inflation, and central bank accommodation.

Equities’ recovery has been slow and steady though, unlike the 29% gain investors have enjoyed in 2019. As shown in the LPL Chart of the Day, the S&P 500 has grown at an 11.2% annualized rate over the past 10 years. Stocks have climbed at a faster rate in three other decades since 1950.

The-S&P 500's-Decade-Challenge

Investors have endured their fair share of pullbacks, too. The S&P 500 has posted six corrections (or a 10% decline from a 52-week high) in the past 10 years, including two 19% slides—one in October 2011, the other in December 2018. The volatility was uncomfortable, but stocks ultimately bounced back to new highs each time.

“Patient investors have flourished in this decade,” said LPL Financial Chief Investment Strategist John Lynch. “The biggest lesson for investors in recent years has been the importance of sticking to your investing plan in times of volatility and calm.”

It’s tough to say what the next decade has in store for the stock market. The 2000s were some of the worst years for stock performance, and the S&P 500 has clocked middle-of-the-road returns since then. There’s still evidence of cash on the sidelines, and sentiment remains largely in check.

We believe the bull market could last at least through 2020, and we expect the S&P 500 to rise from these levels as earnings grow. We wish all of you a happy New Year, and we’re excited to watch the markets with you in the next decade.



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

The modern design of the S&P 500 stock index was first launched in 1957. Performance back to 1950 incorporates the performance of predecessor index, the S&P 90.

This Research material was prepared by LPL Financial, LLC.

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