Which Investments Have the Highest Historical Returns? (2024)

The U.S. stock market has long been considered the source of the greatest returns for investors, outperforming all other types of investments including financial securities, real estate, commodities, and art collectibles over the past century.

Whether stocks are the best investment depends on the historical timeframe in which returns are studied. For individual investors, choosing where to invest for the highest returns also depends on their own investment horizons. The higher volatility of stock prices means that shorter investment time periods carry greater risk.

Key Takeaways

  • The U.S. stock market is considered to offer the highest investment returns over time.
  • Higher returns, however, come with higher risk.
  • Stock prices typically are more volatile than bond prices.
  • Stock prices over shorter time periods are more volatile than stock prices over longer time periods.
  • During shorter time periods, the market doesn't get the chance to recover from the economic events and conditions that can affect prices and returns.

Long-Term Returns From Stocks

The stock market has proven that it produces higher gains over long time periods compared to bonds. For example, one hundred dollars invested in the Standard & Poor's 500 Index (S&P 500) in 1928 would have been worth more than $700,000 by 2021. In comparison, the same $100 invested in 10-year Treasuries for the same time period would have been worth only a little more than $8,500.

Stock Holding Periods Matter

Of course, not everyone holds the same stocks for many decades. Plenty of people lose money in the market in the shorter term. The key to capturing high returns from the U.S. stock market is to invest for the long term. That means letting your money remain invested while waiting out short-term volatility.

For example, the S&P 500 is far more volatile over any 12-month period than longer term. That means you face a greater risk of losing money during a period of one year (should you sell). Stocks tend to fall sharply just prior to and during economic recessions. Time the market poorly and your losses could be painful.

Stretch the holding period from 12 months to five years and you’re more likely to make money. Between 1945 and 1995, only a few five-year periods would have resulted in a loss in the S&P 500. A 10-year holding period performed even better, with returns averaging about 13%—and zero negative returns. So the longer the holding period, the more likely you are to make money.

Have a look at these numbers. From 1928 to 2021, treasury bonds rose in 76 of those years while stocks rose in 69. This reflects the short-term volatility the stock market experiences despite rewarding investors with higher returns than the bond market over the long term.

The shorter the holding period, the greater the risk of losing money in more volatile markets.

Stocks vs. Commodities in Recent Years

Despite the burst of the Dotcom Bubble in 2001 and the global financial crisis of 2008, stocks have produced solid gains over the past two decades, as well.

However, from 1999 to 2018, the S&P 500 was outperformed by real estate investment trusts (REITs), gold, and oil. During that time, REITs gained 9.9% a year, gold gained 7.7%, and oil gained 7%. The S&P 500 rose 5.6% per year.

These numbers point not only to the challenge of volatility but perhaps also to the wisdom of diversification.

Stocks vs. Housing

Many people consider a home an excellent long-term investment. Home prices have risen steadily over time, particularly in recent decades and most dramatically during the build-up of the housing bubble that peaked in 2005.

However, over the longer term, the return is less impressive. Between 1890 and 2015, after accounting for inflation, U.S. home prices rose less than 1% annually. That's just a fraction of the rise in the Dow Jones Industrial Average.

Why Does the U.S. Stock Market Offer Solid Returns Over Time?

The stock market represents U.S. companies that are committed to building profits and sharing them with their investors. In addition, the U.S. upholds an economic system that allows the business community to thrive. As public businesses grow, so should the returns offered to long-term investors.

What's an Example of a Company With Good Historical Returns?

Famously, Warren Buffett has been a committed long-term investor in the U.S. stock market through his company, Berkshire Hathaway. From 1964 to 2021, his stock market investment choices have returned an astonishing 3,641,613%.

How Does Being a Long-Term Investor Help Build Returns?

A key to building high stock market returns is to let your portfolio weather the periods of price drops due to economic events that are bound to happen over time. Although portfolio values can decrease, investors won't realize an actual loss during these periods unless they sell their investment(s). Simply by holding on to investments during rough market patches, you give them the opportunity to recover to previous levels and grow even more in value.

Which Investments Have the Highest Historical Returns? (2024)

FAQs

Which Investments Have the Highest Historical Returns? ›

Over the last twenty years, the top-performing United States stocks are Monster Beverage, Apple, Nvidia, Booking Holdings, and Equinix. Monster Beverage is particularly interesting because the company was founded by South Africans who moved to the United States.

How do you get 10% return on investment? ›

Here's my list of the 10 best investments for a 10% ROI.
  1. How to Get 10% Return on Investment: 10 Proven Ways.
  2. High-End Art (on Masterworks)
  3. Paying Down High-Interest Loans.
  4. U.S. Government I-Bonds.
  5. Stock Market Investing via Index Funds.
  6. Stock Picking.
  7. Junk Bonds.
  8. Buy an Existing Business.
May 1, 2023

What are the best stocks past 20 years? ›

Over the last twenty years, the top-performing United States stocks are Monster Beverage, Apple, Nvidia, Booking Holdings, and Equinix. Monster Beverage is particularly interesting because the company was founded by South Africans who moved to the United States.

What is the safest investment with the highest return? ›

The Best Safe Investments of June 2023
Investment TypeSafetyLiquidity
Treasury bills, notes and bondsHighHigh
Money market mutual fundsHighHigh
Treasury Inflation-Protected Securities (TIPS)HighHigh
High-yield savings accountsHighHigh
3 more rows
May 9, 2023

What will 10000 be worth in 20 years? ›

With that, you could expect your $10,000 investment to grow to $34,000 in 20 years.

Is 20% return on investment good? ›

What Is a Good ROI? According to conventional wisdom, an annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. This is also about the average annual return of the S&P 500, accounting for inflation.

What would $1000 invested in Apple in 1984 be worth today? ›

23, 1984). A $1,000 investment could have purchased 7,692.31 shares of AAPL at the time. The $1,000 investment in AAPL shares would be worth $1,162,615.73 today, based on a price of $151.01 for Apple stock at the time of writing.

Which stocks that double every 3 years? ›

Stock Doubling every 3 years
S.No.NameCMP Rs.
1.Guj. Themis Bio.749.10
2.Praveg494.20
3.Refex Industries507.80
4.Tanla Platforms782.20
8 more rows

What is the most successful stock of all time? ›

The Best Performing Stocks in History
  • Coca-Cola. (NASDAQ: KO) ...
  • Altria. (NASDAQ: MO) ...
  • Amazon.com. (NASDAQ: AMZN) ...
  • Celgene. (NASDAQ: CELG) ...
  • Apple. (NASDAQ: AAPL) ...
  • Alphabet. (NASDAQ:GOOG) ...
  • Gilead Sciences. (NASDAQ: GILD) ...
  • Microsoft. (NASDAQ: MSFT)

How can I double my money without risk? ›

5 Ways to Double Your Money
  1. Take Advantage of 401(k) Matching.
  2. Invest in Value and Growth Stocks.
  3. Increase Your Contributions.
  4. Consider Alternative Investments.
  5. Be Patient.
Nov 1, 2022

What is the #1 safest investment? ›

Here are the best low-risk investments in June 2023:

Series I savings bonds. Short-term certificates of deposit. Money market funds. Treasury bills, notes, bonds and TIPS.

How much monthly income will 200k generate? ›

A $200,000 annuity would pay you approximately ,042 each month for the rest of your life if you purchased the annuity at age 70 and began taking payments immediately.

How much is $100 at 10% interest at the end of each year forever worth today? ›

Present value of perpetuity:

So, a $100 at the end of each year forever is worth $1,000 in today's terms.

Can I live off interest on a million dollars? ›

Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.

Will $10 million dollars last a lifetime? ›

The simple answer is yes. You can retire on 10 million dollars. However, there are a few things to consider before making this decision. First, you need to make sure that you have enough saved up to cover your expenses.

How do I get 15% return? ›

Best way to get 15% p.a. on your investment
  1. Direct equity. Buying a part of a company from the stock market can prove beneficial because the company is growing, causing your investments to multiply. ...
  2. Real estate. ...
  3. Gold. ...
  4. Equity mutual funds. ...
  5. Debt mutual funds. ...
  6. PPF. ...
  7. FD.

What is a good rate of return on 401k? ›

Many retirement planners suggest the typical 401(k) portfolio generates an average annual return of 5% to 8% based on market conditions. But your 401(k) return depends on different factors like your contributions, investment selection and fees.

Is 7% a good return? ›

A good return on investment is generally considered to be about 7% per year, based on the average historic return of the S&P 500 index, and adjusting for inflation. But of course what one investor considers a good return might not be ideal for someone else.

How much will Tesla stock be worth in 10 years? ›

“I think in 2025 it (Tesla) will be $500 to $600 (per share). And in eight to ten years, we ought to be somewhere around $4.5 trillion.” A market capitalization of $4.5 trillion would make Tesla more valuable than Apple and Saudi Aramco combined, a claim that Musk made in 2022.

What $1000 invested in stocks 10 years ago would be worth today? ›

$1000 Invested In This Stock 10 Years Ago Would Be Worth $5,700 Today. Be Smarter Than Your Friends: Benzinga members get 3 trade opportunities & the hot takes on the economy every single week.

How much would $10000 in Apple stock at its IPO in 1980 be worth today? ›

Factoring in the company's five stock splits, these 454 shares would have increased to 101,696 shares, as of today. With Apple closing last week at $140.09, it means an initial $10,000 investment nearly 42 years ago would now be worth $14,246,593. Keep in mind that this figure doesn't take into account dividends paid.

Which stock will make me rich in 2023? ›

Best S&P 500 stocks as of June 2023
Company and ticker symbolPerformance in 2023
NVIDIA (NVDA)159.1%
Meta Platforms (META)120.0%
Advanced Micro Devices (AMD)82.5%
Salesforce (CRM)68.5%
6 more rows
Jun 1, 2023

What stocks will skyrocket in 2023? ›

10 Best Growth Stocks Of June 2023
  • Bank of America's Best Growth Stocks of 2023.
  • Amazon (AMZN)
  • Constellation Energy (CEG)
  • Chipotle Mexican Grill (CMG)
  • Alphabet (GOOG, GOOGL)
  • Eli Lilly (LLY)
  • Match (MTCH)
  • Progressive (PGR)
Jun 1, 2023

Which is best stock for next 10 years? ›

5 Best Growth Stocks for the Next 10 Years
Growth stockYear-to-date return (as of May 10 close)
DexCom Inc. (DXCM)8.2%
Fortinet Inc. (FTNT)37.1%
Tesla Inc. (TSLA)36.8%
Tractor Supply Co. (TSCO)8.9%
1 more row
May 11, 2023

Which US stock has given the highest return? ›

10 Best-Performing Stocks of the Past 30 Years
Best-performing stock30-yr total returnValue of initial $10,000 stake
Monster Beverage Corp. (ticker: MNST)213,088%$21.3 million
Amazon.com Inc. (AMZN)168,927%$16.9 million
Pool Corp. (POOL)49,989%$5 million
Apple Inc. (AAPL)46,544%$4.7 million
6 more rows
May 19, 2023

What is the best stock to make money fast? ›

In addition to Amgen, Inc. (NASDAQ:AMGN), other Fast Money stocks that are widely held by elite hedge funds include Tesla, Inc. (NASDAQ:TSLA), UnitedHealth Group Inc. (NYSE:UNH), and Microsoft Corporation (NASDAQ:MSFT).

What is the highest a single stock has ever gone? ›

  • What Is the Highest Stock Price Ever? Berkshire Hathaway holds the title for having the highest stock price—$445,000.
  • What Was Apple's Highest Stock Price Ever? Apple's highest stock price was $702.10 in September 2012.
  • How Can You Find a Stock's All-Time High and All-Time Low?

How do I invest 15% return? ›

The 15*15*15 rule says that one can amass a crore by investing only Rs 15,000 a month for a duration of 15 years in a stock that offers 15% returns per annum. It is purely an effect of compounding.

Is 10% return realistic? ›

According to the S&P 500 index, the average historical return is approximately 10% without inflation. However, that doesn't mean that an investor is always going to make 10% on investment return. In the case of the stock market, people can make, on average, from 5% to 7% on returns.

What is the 10X investing rule? ›

The 10X Investment Consumption Rule simply states that before you buy any product or service you don't need, you must first make an investment return equal to at least 10X the cost of such product or service.

Is 10% stock return good? ›

Stock Market Rate of Return Historically

Since its founding, the S&P 500 has averaged right around 10% yearly return over time. However, this doesn't mean that each year will match that. Remember, this is 10% yearly over time.

What if I invest $500 a month for 15 years? ›

Invest $500 a month for 15 years and get to $250,000

Saving $500 per month equates to $6,000 a year and $90,000 in 15 years. Investing your savings in the stock market will grow that little fortune into big fortune. Normally, investors can get long-term market returns of about 7% from the TSX index.

How to turn $25,000 into a million? ›

Based on an investment of $25,000 today, it'd take a return of 13.08% per year to transform into $1 million in 30 years. If you require a shorter time to grow your investments, you'll need a higher return to arrive at $1 million sooner.

How much do I need to invest to make $1,000 a month? ›

Reinvest Your Payments

The truth is that most investors won't have the money to generate $1,000 per month in dividends; not at first, anyway. Even if you find a market-beating series of investments that average 3% annual yield, you would still need $400,000 in up-front capital to hit your targets. And that's okay.

Is 20% return possible? ›

A 20% return is possible, but it's a pretty significant return, so you either need to take risks on volatile investments or spend more time invested in safer investments.

Is 30% return possible? ›

(However, one could achieve a 150/0 through the use of leverage, with a margin account. But, know that any investment return must be netted against the cost of leverage, i.e. the interest rate charged for the funds borrowed.) In short, achieving a sustained 30% stock market return is highly unlikely to happen.

What is the 7% investment rule? ›

Let's say you have an investment balance of $100,000, and you want to know how long it will take to get it to $200,000 without adding any more funds. With an estimated annual return of 7%, you'd divide 72 by 7 to see that your investment will double every 10.29 years.

What is the #1 rule of investing? ›

1 – Never lose money. Let's kick it off with some timeless advice from legendary investor Warren Buffett, who said “Rule No. 1 is never lose money.

What is the 25 rule investing? ›

The first is the rule of 25: You should have 25 times your planned annual spending saved before you retire. That means that if you plan to spend $30,000 during your first year in retirement, you should have $750,000 invested when you walk away from your desk.

What is the average 10 year return of the S&P 500? ›

S&P 500 10 Year Return (I:SP50010Y)

S&P 500 10 Year Return is at 156.3%, compared to 161.0% last month and 215.4% last year. This is higher than the long term average of 112.6%.

What is the S&P 500 return for the last 30 years? ›

Average Market Return for the Last 30 Years

Looking at the S&P 500 for the years 1992 to 2021, the average stock market return for the last 30 years is 9.89% (7.31% when adjusted for inflation).

What stock has the best 10 year return? ›

Best Performing Stocks Over the Last 10 Years
Ticker10-Year Performance (%)
1NVDA10,976%
2AMD2826%
3TSLA2815%
4AVGO2670%
6 more rows
May 31, 2023

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