If you invested $1 in the S&P 500 at the beginning of 1975, you would have about $4.79 at the end of 1985, assuming you reinvested all dividends. This is a return on investment of 378.71%, or 15.30% per year.
This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 139.36% cumulatively, or 8.26% per year.
If you used dollar-cost averaging (monthly) instead of a lump-sum investment, you'd have $3.56.
The graph below shows the performance of $1 over time if invested in an S&P 500 index fund. The returns assume that all dividends are automatically reinvested.
The nominal return on investment of $1 is $3.79, or 378.71%. This means by 1985 you would have $4.79 in your pocket.
However, it's important to take into account the effect of inflation when considering an investment and especially a long-term investment. You can convert S&P returns to their real (inflation-adjusted) value using an inflation calculation based on the U.S. Bureau of Labor Statistics Consumer Price Index (CPI).
In the case of the returns described above, the CPI in 1975 was 53.800 and the CPI in 1985 was 107.600.
The ratio between these CPIs describes how relative buying power of a dollar has changed over 10 years.
Adjusted for inflation, the $4.79 nominal end value of the original $1 investment would have a real return of roughly $1.39 in 1975 dollars. This means the inflation-adjusted return is 139.36% as opposed to the original 378.71%.
The table below shows the full dataset pertaining to a $1 investment, including gains and losses over the 132-month period between 1975 and 1985.
Note that data shown is the monthly average closing price. Returns include dividends.
Year
Month
Return (%)
Amount ($)
CPI
1975
1
10.81%
1.11
52.10
1975
2
4.97%
1.16
52.50
1975
3
1.49%
1.18
52.70
1975
4
6.71%
1.26
52.90
1975
5
2.89%
1.30
53.20
1975
6
0.43%
1.30
53.60
1975
7
-7.00%
1.21
54.20
1975
8
-0.85%
1.20
54.30
1975
9
4.97%
1.26
54.60
1975
10
2.04%
1.29
54.90
1975
11
-1.18%
1.27
55.30
1975
12
9.55%
1.39
55.50
1976
1
4.18%
1.45
55.60
1976
2
0.80%
1.46
55.80
1976
3
1.10%
1.48
55.90
1976
4
-0.38%
1.47
56.10
1976
5
0.90%
1.49
56.50
1976
6
2.67%
1.52
56.80
1976
7
-0.56%
1.52
57.10
1976
8
2.44%
1.55
57.40
1976
9
-3.11%
1.51
57.60
1976
10
-0.37%
1.50
57.90
1976
11
3.79%
1.56
58.00
1976
12
-0.54%
1.55
58.20
1977
1
-2.37%
1.51
58.50
1977
2
-0.05%
1.51
59.10
1977
3
-1.19%
1.49
59.50
1977
4
0.06%
1.49
60.00
1977
5
0.90%
1.51
60.30
1977
6
1.28%
1.53
60.70
1977
7
-2.08%
1.49
61.00
1977
8
-1.18%
1.48
61.20
1977
9
-2.20%
1.44
61.40
1977
10
0.98%
1.46
61.60
1977
11
-0.08%
1.46
61.90
1977
12
-3.39%
1.41
62.10
1978
1
-0.97%
1.39
62.50
1978
2
0.27%
1.40
62.90
1978
3
4.83%
1.47
63.40
1978
4
5.50%
1.55
63.90
1978
5
0.67%
1.56
64.50
1978
6
-0.06%
1.56
65.20
1978
7
7.33%
1.67
65.70
1978
8
0.40%
1.68
66.00
1978
9
-2.77%
1.63
66.50
1978
10
-5.44%
1.54
67.10
1978
11
1.92%
1.57
67.40
1978
12
4.19%
1.64
67.70
1979
1
-1.06%
1.62
68.30
1979
2
2.34%
1.66
69.10
1979
3
2.43%
1.70
69.80
1979
4
-1.89%
1.67
70.60
1979
5
2.42%
1.71
71.50
1979
6
1.42%
1.73
72.30
1979
7
5.01%
1.82
73.10
1979
8
1.54%
1.84
73.80
1979
9
-3.35%
1.78
74.60
1979
10
-0.32%
1.78
75.20
1979
11
4.40%
1.86
75.90
1979
12
3.31%
1.92
76.70
1980
1
4.40%
2.00
77.80
1980
2
-8.78%
1.83
78.90
1980
3
-1.16%
1.80
80.10
1980
4
5.04%
1.89
81.00
1980
5
6.86%
2.02
81.80
1980
6
4.97%
2.13
82.70
1980
7
3.50%
2.20
82.70
1980
8
2.84%
2.26
83.30
1980
9
3.32%
2.34
84.00
1980
10
4.61%
2.45
84.80
1980
11
-1.24%
2.42
85.50
1980
12
0.01%
2.42
86.30
1981
1
-3.07%
2.34
87.00
1981
2
4.14%
2.44
87.90
1981
3
1.29%
2.47
88.50
1981
4
-1.62%
2.43
89.10
1981
5
0.86%
2.45
89.80
1981
6
-2.02%
2.40
90.60
1981
7
0.80%
2.42
91.60
1981
8
-8.30%
2.22
92.30
1981
9
1.73%
2.26
93.20
1981
10
3.04%
2.33
93.40
1981
11
1.18%
2.35
93.70
1981
12
-4.80%
2.24
94.00
1982
1
-1.91%
2.20
94.30
1982
2
-2.74%
2.14
94.60
1982
3
5.47%
2.25
94.50
1982
4
0.57%
2.27
94.90
1982
5
-5.27%
2.15
95.80
1982
6
0.24%
2.15
97.00
1982
7
0.79%
2.17
97.50
1982
8
12.10%
2.43
97.70
1982
9
8.88%
2.65
97.90
1982
10
4.50%
2.77
98.20
1982
11
1.36%
2.81
98.00
1982
12
3.93%
2.92
97.60
1983
1
2.13%
2.98
97.80
1983
2
3.87%
3.09
97.90
1983
3
4.20%
3.22
97.90
1983
4
4.42%
3.37
98.60
1983
5
1.75%
3.42
99.20
1983
6
0.71%
3.45
99.50
1983
7
-2.41%
3.37
99.90
1983
8
3.31%
3.48
100.20
1983
9
0.65%
3.50
100.70
1983
10
-1.14%
3.46
101.00
1983
11
-0.13%
3.46
101.20
1983
12
1.58%
3.51
101.30
1984
1
-5.11%
3.33
101.90
1984
2
0.44%
3.35
102.40
1984
3
0.51%
3.36
102.60
1984
4
-0.25%
3.35
103.10
1984
5
-1.85%
3.29
103.40
1984
6
-0.91%
3.26
103.70
1984
7
9.21%
3.56
104.10
1984
8
1.41%
3.61
104.50
1984
9
-0.41%
3.60
105.00
1984
10
1.29%
3.64
105.30
1984
11
-0.71%
3.62
105.30
1984
12
4.70%
3.79
105.30
1985
1
5.79%
4.01
105.50
1985
2
-0.48%
3.99
106.00
1985
3
1.02%
4.03
106.40
1985
4
2.74%
4.14
106.90
1985
5
2.51%
4.24
107.30
1985
6
2.25%
4.34
107.60
1985
7
-1.85%
4.26
107.80
1985
8
-1.88%
4.18
108.00
1985
9
1.50%
4.24
108.30
1985
10
6.42%
4.51
108.70
1985
11
5.29%
4.75
109.00
1985
12
0.75%
4.79
109.30
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Remember, returns are based on the average closing price across the entire month. Some losses are offset by dividend returns.
Dollar-cost averaging
Dollar-cost averaging is an alternative to investing the full lump-sum of $1.00 up-front. Instead, the capital is invested over a period of time.
Consider a strategy in which $1.00 was invested in the S&P 500 over a period of no more than 24 months beginning in 1975. This would result in a final amount of $3.56, including dividend reinvestments. In this particular case, dollar-cost average returns are less than the returns of a lump-sum investment (which ends with $4.79).
Year
Month
Contribution ($)
Amount ($)
1975
1
0.04
0.04
1975
2
0.04
0.09
1975
3
0.04
0.13
1975
4
0.04
0.18
1975
5
0.04
0.23
1975
6
0.04
0.27
1975
7
0.04
0.29
1975
8
0.04
0.32
1975
9
0.04
0.38
1975
10
0.04
0.43
1975
11
0.04
0.46
1975
12
0.04
0.55
1976
1
0.04
0.62
1976
2
0.04
0.66
1976
3
0.04
0.71
1976
4
0.04
0.75
1976
5
0.04
0.79
1976
6
0.04
0.86
1976
7
0.04
0.89
1976
8
0.04
0.95
1976
9
0.04
0.96
1976
10
0.04
1.00
1976
11
0.04
1.08
1976
12
0.04
1.11
1977
1
0.04
1.12
1977
2
-
1.12
1977
3
-
1.11
1977
4
-
1.11
1977
5
-
1.12
1977
6
-
1.14
1977
7
-
1.11
1977
8
-
1.10
1977
9
-
1.07
1977
10
-
1.09
1977
11
-
1.08
1977
12
-
1.05
1978
1
-
1.04
1978
2
-
1.04
1978
3
-
1.09
1978
4
-
1.15
1978
5
-
1.16
1978
6
-
1.16
1978
7
-
1.24
1978
8
-
1.25
1978
9
-
1.21
1978
10
-
1.15
1978
11
-
1.17
1978
12
-
1.22
1979
1
-
1.20
1979
2
-
1.23
1979
3
-
1.26
1979
4
-
1.24
1979
5
-
1.27
1979
6
-
1.29
1979
7
-
1.35
1979
8
-
1.37
1979
9
-
1.33
1979
10
-
1.32
1979
11
-
1.38
1979
12
-
1.43
1980
1
-
1.49
1980
2
-
1.36
1980
3
-
1.34
1980
4
-
1.41
1980
5
-
1.51
1980
6
-
1.58
1980
7
-
1.64
1980
8
-
1.68
1980
9
-
1.74
1980
10
-
1.82
1980
11
-
1.80
1980
12
-
1.80
1981
1
-
1.74
1981
2
-
1.81
1981
3
-
1.84
1981
4
-
1.81
1981
5
-
1.82
1981
6
-
1.79
1981
7
-
1.80
1981
8
-
1.65
1981
9
-
1.68
1981
10
-
1.73
1981
11
-
1.75
1981
12
-
1.67
1982
1
-
1.64
1982
2
-
1.59
1982
3
-
1.68
1982
4
-
1.69
1982
5
-
1.60
1982
6
-
1.60
1982
7
-
1.61
1982
8
-
1.81
1982
9
-
1.97
1982
10
-
2.06
1982
11
-
2.09
1982
12
-
2.17
1983
1
-
2.22
1983
2
-
2.30
1983
3
-
2.40
1983
4
-
2.50
1983
5
-
2.55
1983
6
-
2.57
1983
7
-
2.50
1983
8
-
2.59
1983
9
-
2.60
1983
10
-
2.57
1983
11
-
2.57
1983
12
-
2.61
1984
1
-
2.48
1984
2
-
2.49
1984
3
-
2.50
1984
4
-
2.49
1984
5
-
2.45
1984
6
-
2.43
1984
7
-
2.65
1984
8
-
2.69
1984
9
-
2.68
1984
10
-
2.71
1984
11
-
2.69
1984
12
-
2.82
1985
1
-
2.98
1985
2
-
2.97
1985
3
-
3.00
1985
4
-
3.08
1985
5
-
3.16
1985
6
-
3.23
1985
7
-
3.17
1985
8
-
3.11
1985
9
-
3.15
1985
10
-
3.36
1985
11
-
3.53
1985
12
-
3.56
Click to show 114 more rows
Data Sources
The information on this page is derived from Robert Shiller's book, Irrational Exuberance and the accompanying dataset, as well as the U.S. Bureau of Labor Statistics' monthly CPI logs.
Note that S&P index value for the current quarter is based on a moving average of closing prices, per Robert Shiller's methodology. The inflation data used is based on annual CPI averages.
About the author
Ian Webster is an engineer and data expert based in San Mateo, California. He has worked for Google, NASA, and consulted for governments around the world on data pipelines and data analysis. Disappointed by the lack of clear resources on the impacts of inflation on economic indicators, Ian believes this website serves as a valuable public tool. Ian earned his degree in Computer Science from Dartmouth College.
