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Average Stock Market Returns Canada | Historical Data

Updated

Average Stock Market Returns

Market Annualized Return Time Period
S&P/TSX Composite 9.3% 1956-2025
S&P 500 (USD) 10.5% 1926-2025
MSCI World (USD) 8.9% 1987-2025
Balanced Portfolio (60/40) 7.5% 1926-2025

These are nominal returns (before inflation). Real returns after inflation are typically 3-4% lower.

Canadian Market (S&P/TSX Composite)

Historical Annual Returns

Period Annualized Return
1 year (2025) +14.2%
5 years (2021-2025) +9.8%
10 years (2016-2025) +8.5%
20 years (2006-2025) +7.2%
30 years (1996-2025) +8.9%

Year-by-Year Returns (Recent)

Year S&P/TSX Return
2025 +14.2%
2024 +17.4%
2023 +11.7%
2022 -5.8%
2021 +25.1%
2020 +5.6%
2019 +22.9%
2018 -8.9%
2017 +9.1%
2016 +21.1%

Best and Worst Years

Category Year Return
Best year 1979 +44.8%
Worst year 2008 -33.0%
Average positive year — +16.5%
Average negative year — -12.3%

US Market (S&P 500)

Historical Annual Returns

Period Annualized Return (USD)
1 year (2025) +18.5%
5 years (2021-2025) +12.3%
10 years (2016-2025) +13.1%
20 years (2006-2025) +10.2%
30 years (1996-2025) +10.8%

Year-by-Year Returns (Recent)

Year S&P 500 Return (USD)
2025 +18.5%
2024 +23.3%
2023 +26.3%
2022 -18.1%
2021 +28.7%
2020 +18.4%
2019 +31.5%
2018 -4.4%
2017 +21.8%
2016 +12.0%

Global Diversified Portfolio

Using a global all-in-one ETF (like XEQT or VEQT):

Period Approximate Return
5 years 10-12%
10 years 9-11%
20 years 8-10%
30+ years 8-10%

Global diversification typically provides:

  • Lower volatility than any single country
  • Exposure to different economic cycles
  • Protection if one market underperforms

Returns After Inflation

Real returns (adjusted for inflation) are what actually grows your purchasing power:

Market Nominal Return Inflation Real Return
S&P/TSX 9.3% 3.0% ~6.3%
S&P 500 10.5% 3.0% ~7.5%
Bonds 5.0% 3.0% ~2.0%
Cash/GICs 3.5% 3.0% ~0.5%

Over 30 years, a 6% real return turns $10,000 into $57,400 in today’s dollars.

Return Variability

The “average” return is misleading because returns vary wildly:

S&P 500 Returns Frequency
+20% or more 34% of years
+10% to +20% 20% of years
0% to +10% 15% of years
-10% to 0% 18% of years
-10% or worse 13% of years

Key insight: The market returns ~10% “on average” but almost never returns exactly 10% in any given year.

Sequence of Returns Example

Both portfolios average 8% over 4 years, but end values differ:

Portfolio A:

Year Return End Value
Start — $100,000
Year 1 +20% $120,000
Year 2 +15% $138,000
Year 3 -5% $131,100
Year 4 +2% $133,722

Portfolio B:

Year Return End Value
Start — $100,000
Year 1 -5% $95,000
Year 2 +2% $96,900
Year 3 +15% $111,435
Year 4 +20% $133,722

Same average. Same ending value. But very different ride.

What Returns Should You Expect?

Conservative Estimates

For financial planning, use lower estimates than historical averages:

Asset Class Planning Estimate
Equities 6-7% nominal
Bonds 3-4% nominal
60/40 Portfolio 5-6% nominal

This accounts for:

  • Future returns may be lower than historical
  • Your personal returns include fees
  • Market timing mistakes

How to Think About Returns

  1. Long-term only: 8-10% applies over 20-30+ years
  2. Expect volatility: Individual years can be +30% or -30%
  3. Stay invested: Most gains come from a few good days
  4. Fees matter: 2% fees cut your returns significantly

Impact of Fees

MER Gross Return Net Return 30-Year Growth ($100k)
0.2% 8% 7.8% $915,000
0.5% 8% 7.5% $872,000
1.0% 8% 7.0% $761,000
2.0% 8% 6.0% $574,000

A 2% MER costs you $341,000 over 30 years on a $100,000 portfolio.

Missing the Best Days

Staying invested matters more than timing:

Strategy 20-Year Return (S&P 500)
Stay invested +585%
Miss 10 best days +270%
Miss 20 best days +135%
Miss 30 best days +40%

The best days often follow the worst days. Exiting during downturns means missing the recovery.