What Is The Average Stock Market Return?

Talking averages are always tricky when you are talking about lumpy numbers. The average stock market return is the percentage change in the stock market value for one year or a period of years.

Measuring Stock Market Returns And Why S&P 500 Matters

There are several securities indexes that investors pay attention to and use in their analysis. A securities market index is an indicator of market performance, measuring the average value of several securities chosen as a sample to reflect how the market is doing.

Take A Long Term View of The Market

You have a better chance of attaining a 10% average stock market return when you take on a long-term view. Warren Buffett said, “I never attempt to make money on the stock market. I buy on the assumption that they close the market the next day and not reopen it for five years.”

Our Formula For Successful Investing

1. Buy and Hold Investing Strategy Long-term investors with buy-hold strategies recognize that there are bull markets, bear markets, and market corrections. They tend to stay the course when the markets become volatile and may become opportunistic if they have some cash to buy beaten-down names in their portfolio and at bargain levels.

2. Dollar-Cost Averaging The benefits of dollar-cost averaging are that you are avoiding the responsibility and the decision-making of timing your purchases which can be stressful. It ignores the outside events that may cause noise and short-term stock swings, providing the long-term investment approach.

3. Avoid Market Timing Those who practice market timing attempt to predict the short-term movements of various markets, and based on predictions, move assets around to capture market gains and avoid market losses.

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