How do I Roll a 10-Year Average Return of the Stock Market?

By Business & Finance Last updated Wednesday, April/17/2024

1). Track the S&P 500, S&P Composite 1500, Dow Jones Industrial Average or the Russel 3000 index. These are all indices designed to track the overall performance of the U.S. stock market. The S&P Composite 1500 includes the S&P 500 as well as two other indices that track mid- and small-cap stocks.
2). Examine 10 years of price history of the index you are following. Add the return for each year and then divide by 10 to get the 10-year average return. You can start at any year as long as there are 10 consecutive years of price information available.
3). Each year, add the return for the most recent year to your calculation and drop the return for the most distant year. For example, assume you are calculating a rolling 10-year return from 1990 onward using the S&P 500. Start by adding together the returns for 1990 through 1999 and then divide by 10. To get the next number, add the return for 2000, drop the return for 1990 and repeat the calculation. Repeat this process each year to get a rolling 10-year average return.

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