2021 S&P 500 Return

Written by:
PK

The S&P 500 Price index returned 26.61% in 2021. Using a better calculation which includes dividend reinvestment, the S&P 500 returned 28.41%.

Maximizing 2021 S&P 500 Return: Buy It, Hold It, and Reinvest It

There are two ways to compute an annual return, and the numbers I just quoted you assume you did all your investing in a single year. Specifically, the above returns assume you bought the market open on January 4, 2021, and sold at the exact close on December 31, 2021.


If you alternatively meant a "one-year span", those two returns, respectively, are 26.893% and 28.705%. This assumes, instead, that you bought the December 31, 2020 close.

S&P 500 Index Price Calculation

Price Based On2021 BeginDec 31 CloseReturn
Jan 4 Open3764.614766.1826.605%
Dec 31 Close3756.074766.1826.893%

S&P 500 Total Return Price Calculation

Price Based On2021 BeginDec 31 CloseReturn
Jan 4 Open7,777.419,986.7028.407%
Dec 31 Close7,759.359,986.7028.705%

Dividends Matter

Annually, I talk about how the exact date you pick doesn't much matter... as long as you keep your timeframes consistent. However, you do need to mind those dividends!

Even with a pandemic raging in the background and all sorts of geopolitical worries, companies continued to pay dividends consistently. Even if you didn't reinvest your dividends, unless you burned your dividend checks or otherwise discarded your proceeds, you do need to account for that extra gain.

Source on the 2021 S&P 500 Return Calculations

S&P Dow Jones Indices owns the S&P 500 Index and the total return index. They only added the total return index in 1987; before then, you have to construct your own index proxy to see how the index has fared.

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 2021 S&P 500 Return

You can find the S&P 500 and Total Return index at Yahoo!. Here's a graph showing the delta in 2021:

S&P 500 in 2020: Reinvested Dividends versus Price Returns
S&P 500 in 2021: Reinvested Dividends versus Price Returns

All you had to do to pick up an extra 1.802 percentage points of return? Reinvest your dividends.Yes, it's not exact due to the timing of your payments and purchases, slippage if you had actually made the order instead of only in theory, taxes, and the like. However - it was a very real amount.

Other years:

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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