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 On||Price||Dec 31 Close||Gain/Loss|
|Jan 2 Open||3244.67||3756.07||15.76%|
|Dec 31 Close||3230.78||3756.07||16.26%|
S&P 500 Total Return Price Calculation
|Price From||Price||Dec 31 Close||Gain/Loss|
|Jan 2 Open||6582.55||7759.35||17.88%|
|Dec 31 Close||6553.57||7759.35||18.40%|
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:
- S&P 500 Dividend Reinvestment Calculator
See dividend reinvestment calculations on the S&P 500 back as far as we can cover them (1871!)
- S&P 500 Periodic Reinvestment and Dividend Calculator
Calculator trying to estimate fees and taxes. Allows periodic scheduled additions to investments.
- S&P 500 Historical Return Calculator
See the average, median, best, and worst returns on the S&P 500 over a time period.
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:
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!
- 2019 S&P 500 Return
- 2018 S&P 500 Return
- 2017 S&P 500 Return
- 2016 S&P 500 Return
- 2015 S&P 500 Return
- 2014 S&P 500 Return
- 2013 S&P 500 Return
- 2012 S&P 500 Return
What do you see the S&P 500 doing in 2021?