Annual return
The steady yearly rate that leads to the same final result as the real path, with all its ups and downs.
It's a way to compare investments over different time spans. It answers: at what steady yearly rate would you have to grow to reach the same result?
One dollar in the US stock market in June 1926, with dividends reinvested, became $19,133 by August 2026. That's the same as 10.3% a year for 100 years. The real path was very bumpy, as the chart shows: the dotted line is the steady shortcut that ends in the same place.
Over the last 10 years, bitcoin returned 61% a year and the S&P 500 15.2%.
It's the compound annual growth rate (CAGR): (final value / initial value)1 / years − 1.
It isn't the average of each year's return. A +50% year followed by a −50% year averages 0%, but leaves you with 75% of your money: an annual return of −13.4%. The more volatile the asset, the further apart the average and the compound return.
It depends a lot on the start and end dates: starting at a peak or at a low changes the number.
- What happened
- A steady 10.3% every year
Logarithmic scale, with dividends reinvested.
Where you see it in Compass
- Simulator · ExploreIn Explore, each asset's “historical growth” is its annual return.
- Simulator · SimulateIn Simulate, the one for your own investment.
Related terms
Frequently asked questions
How much does the US stock market return a year?
Since June 1926, with dividends, 10.3% a year. Over the last 10 years, 15.2%. This is past data: it doesn't say what it will return in the future.
Why not use the average of each year?
Because percentages chain by multiplying. With +50% and then −50%, the average is 0%, but the money ends at 75% of what it was.
Calculated and reviewed by Compass. Sources, checks and method
Figures with data as of October 26, 2026. Educational content. Not financial advice. Past results don't guarantee future results.