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.

The shorter your timeframe, the greater the market volatility investors will face. Daily, prices can gyrate wildly with 24-hour financial news chatter you should ignore.

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.

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.

2. Dollar-Cost Averaging

Dollar-cost averaging is a systemic way of investing equal sums of money at regular intervals (usually every month) regardless of the investment’s price. That means you are investing the same fixed dollar amount, such as $300 in the same stock or mutual fund, over a long time.

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. They try to outguess the trend of stock prices based on economic news or company earnings releases.

4. Portfolio Diversification A diversified portfolio is an essential strategy that can help reduce market volatility. Concentration in any one stock, industry, or asset class is a hazardous strategy.

5. Be Careful About Fees The higher the expense ratio, the lower the return. The expense ratios are clearly stated, usually under headings that say “shareholder fees” or in the online prospectus.

6. Asset Allocation and Rebalancing Asset allocation is a form of diversification in which investors decide on the proportions of various assets that will be part of an investment portfolio.

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