The S&P 500 returned 10.4% per year for the 80 years from 1926 through 2005, according to new data from Ibbotson Associates on historical rates of return.
That percentage was unchanged from the 79 years reported last year.
Small-company stocks returned 12.6% annually, a slight decrease from 12.7% for the 79 years. Long-term U.S. government bonds returned 5.5% per year compared with 5.4%, while the 30-day Treasury bill returned 3.7% per year for 80 years, unchanged from 2004.
Inflation remained at 3%.
For 2005 alone, large-company stocks returned 4.9% and small-company stocks, 5.7%. It was the seventh consecutive year that the small caps beat large caps. The "last time small stocks had a run that long was the 10-year period from 1974 through 1983," according to Ibbotson. Government bonds returned 7.8% in 2005 and 30-day Treasury bills, 3%. Inflation was 3.5%, the highest rate since 1990.
