economy

Stock market returns are often subpar after a strong 3-year streak, history shows

While the market has posted solid double-digit returns in the past three years, investors shouldn't get their hopes up that the trend will continue.

Stock market returns are often subpar after a strong 3-year streak, history shows

TL;DR

  • The market has seen solid double-digit returns over the past three years.
  • Historical data from SimCorp indicates that four consecutive stellar years (over 15% returns) have been rare since 1926.
  • Annualized returns were 26% in 2023, 25% in 2024, and an estimated 18% in 2025.
  • A below-average, single-digit return is expected for 2026.
  • The S&P 500 has risen only 8% year-to-date in the current year.
  • The fourth year after a three-year streak of 20%+ annualized returns has an average return of 3.9%, significantly below the overall average of 11.8%.
  • The market is considered to be closer to the end of the rally than the beginning.

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