Over the long run, the S&P 500 (SNPINDEX: ^GSPC) has delivered annualized total returns (including dividends) of 10.3% over its lifetime (since 1957), making it a phenomenal tool for compounding wealth over time. A 10.3% annual return can turn $10,000 into over $189,000 over 30 years, illustrating the power of compound returns.
But the S&P 500 rarely generates that average 10% return in any given year, often a few outsized years offset otherwise mediocre annual returns. And with today’s S&P 500 heavily driven by mega-cap growth stocks, the volatility of the index could be even greater going forward.
Here’s why I expect the S&P 500 to generate much more or much less than 10% in 2026, and what it could mean for your financial portfolio.