Stock market returns between 1921 and 1928
If you invested $532 in the S&P 500 at the beginning of 1921, you would have about $2,876.43 at the end of 1928, assuming you reinvested all dividends. This is a return on investment of 440.68%, or 23.49% per year.
This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 465.98% cumulatively, or 24.19% per year.
If you used dollar-cost averaging (monthly) instead of a lump-sum investment, you'd have $2,542.30.
The graph below shows the performance of $532 over time if invested in an S&P 500 index fund. The returns assume that all dividends are automatically reinvested.
This chart shows the rate of gains and loss by month, including dividends:
Adjusting stock market return for inflation
The nominal return on investment of $532 is $2,344.43, or 440.68%. This means by 1928 you would have $2,876.43 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 1921 was 17.900 and the CPI in 1928 was 17.100.
The ratio between these CPIs describes how relative buying power of a dollar has changed over 7 years.
Adjusted for inflation, the $2,876.43 nominal end value of the original $532 investment would have a real return of roughly $2,479.00 in 1921 dollars. This means the inflation-adjusted return is 465.98% as opposed to the original 440.68%.
For more information on inflation, see our U.S. inflation calculator for 1921.
Full monthly data
The table below shows the full dataset pertaining to a $532 investment, including gains and losses over the 96-month period between 1921 and 1928.
Note that data shown is the monthly average closing price. Returns include dividends.
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 $532.00 up-front. Instead, the capital is invested over a period of time.
Consider a strategy in which $532.00 was invested in the S&P 500 over a period of no more than 24 months beginning in 1921. This would result in a final amount of $2,542.30, including dividend reinvestments. In this particular case, dollar-cost average returns are less than the returns of a lump-sum investment (which ends with $2,876.43).
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.
| Start Value Average monthly close | $7.11 |
| End Value Average monthly close | $17.53 |
| Change in price | +146.55% +13.76% / yr |
| Change incl. dividends | +440.68% +23.49% / yr |
| Change incl. dividends, inflation-adjusted | +465.98% +24.19% / yr |
| Final amount, nominal ($532 base) | $2,876.43 |
| Final amount, inflation-adjusted ($532 base) | $3,011.00 |