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2020 S&P 500 Return

Written by:
PK

The S&P 500 Price index returned 15.76% in 2020. Using a better calculation including dividend reinvestment, the S&P 500 returned 17.88%.

Maximizing 2020 S&P 500 Return: Buying, Holding... and Reinvesting

The numbers I quote in the intro assume you did all of your investing in a single year. That is, you bought the absolute opening price on January 2, 2020, and sold the closing price on December 31, 2020.

If you don't care about the calendar year and would like a "one-year span," I also ran the numbers to buy the close on December 31, 2019, and sell the S&P 500 closing price on December 31, 2020. In that case, the S&P 500 returned 16.26% – or 18.40%, counting reinvested dividends.

S&P 500 Index Price Calculation

Price Based OnPriceDec 31 CloseGain/Loss
Jan 2 Open3244.673756.0715.76%
Dec 31 Close3230.783756.0716.26%

S&P 500 Total Return Price Calculation

Price FromPriceDec 31 CloseGain/Loss
Jan 2 Open6582.557759.3517.88%
Dec 31 Close6553.577759.3518.40%

Dividends Matter

Annually, I talk about how the exact date you pick doesn't matter much (but: keep your timeframes consistent!) – but counting your dividends does matter.

2020 was a terrible year – but again, returns were excellent. And only taking price return on the index doesn't tell the whole story. You need to account for the dividends you receive.

Source on the 2020 S&P 500 Return Calculations

S&P Dow Jones Indices owns and maintains the S&P 500 Index (and the total return calculation). They added the total return index in 1987; before then, you'll have to construct your own index proxy to see how the index has fared. Or, you know – check out the rest of the site.

We have a collection of investing calculators and tools – most including provisions for dividend, coupon, or interest reinvestment. Here are some which highlight the S&P 500:

The 2020 S&P 500 Return

Find easy to grab data on both the S&P 500 and Total Return version at Yahoo!. Here's their overlay this year:

S&P 500 in 2020: Reinvested Dividends versus Price Returns

All you had to do to pick up an extra 2.12 percentage points of return? Reinvest your dividends back into the index. Well, you know, not counting fees, commissions, maintenance, and so on – but not a bad deal.

Let's hope the stock market keeps it up in 2021... and the world has a better year, in general. Happy investing!

Other years:

What do you see the S&P 500 doing in 2021?

Don't Quit Your Day Job...

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