Table of how many years it takes to make a specified return on the stock market?
"Well depends but ""on average"" the stock market has historically returned somewhere around 10% per year.  Note, this can vary wildly from year to year see http://en.wikipedia.org/wiki/S%26P_500#Market_statistics So it would be roughly 2.8 years to get your 30% if you happen to get the average market return for those 3 years, but the chances of that happening exactly are slim to none.  You could end up with +50% or -30% over that ~3 year period of time - so the calculation doesn't do you that much good for that short period of time, but if you are talking a span of 30 years then you could plan using that as a very rough ballpark. Good rule of thumb is you shouldn't put any money in the stock market you think you will need anytime in the next 5 years. Formula to figure out total gain would be  Principal x (1+ rate of return) ^ years" The Money Chimp site lets you choose two points in time to see the return. i.e. you give it the time (two dates) and it tells you the return.  One can create a spreadsheet to look at multiple time periods and answer your question that way, but I've not seen it laid out that way in advance. For what it's worth, I am halfway to my retirement number. I can tell you, for example that at X%, I hit my number in Y years. 8.73% gets me 8/25/17 (kid off to college) 3.68% gets me 8/25/21 (kid graduates), so in a sense, we're after the same type of info. With the long term return being in the 10% range, you're going to get 3 years or so as average, but with a skewed bellish curve when run over time. It depends on what stocks you invest in or whether you invest in an index, as all stocks are not created equally. If you prefer to invest directly into individual stocks and you choose ones that are financially health and trending upwards, you should be able to easily outperform any indexes and get your 30% return much quicker. But you always need to make sure that you have a stop loss placed on all of your stocks, because even the best performing companies can go through bad patches. The stop loss prevents you from losing all your capital if the share price suddenly starts going south and turns into a downtrend.
"There are some assumptions which can be made in terms of the flexibility you have - I will start with the least flexible assumption and then move to more flexible assumptions. If you must put down a number 1, your go-to for this(""Change the start period to 1""), is pretty good, and it's used frequently for other divide-by-zero calculations like kda in a video game. The problem I have with '1' is that it doesn't allow you to handle various scales.  Some problems are dealt with in thousands, some in fractions, and some in hundreds of millions. Therefore, you should change the start period to the smallest significantly measurable number you could reasonably have. Here, that would take your example 0 and 896 and give you an increase of 89,500%. It's not a great result, but it's the best you can hope for if you have to put down a number,  and it allows you to keep some of the ""meaning in the change."" If you absolutely must put something This is the assumption that most answers have taken - you can put down a symbol, a number with a notation, empty space, etc, but there is going to be a label somewhere called 'Growth' that will exist. I generally agree with what I've seen, particularly the answers from Benjamin Cuninghma and Nath. For the sake of preservation - those answers can be summarized as putting 'N/A' or '-', possibly with a footnote and asterisk. If you can avoid the measurement entirely The root of your question is ""What do my manager and investors expect to see?"" I think it's valuable to dig even further to ""What do my manager and investors really want to know?"". They want to know the state of their investment. Growth is often a good measurement of that state, but in cases where you are starting from zero or negative, it just doesn't tell you the right information. In these situations, you should avoid % growth, and instead talk in absolute terms which mention the time frame or starting state. For example:" You are looking for the Internal Rate of Return. If you have a spreadsheet like Microsoft Excel you can simply put in a list of the transactions (every time money went in or out) and their dates, and the spreadsheet's XIRR function will calculate a percentage rate of return. Here's a simple example. Investment 1 was 100,000 which is now worth 104,930 so it's made about 5% per year. Investment 2 is much more complicated, money was going in and out, but the internal rate of return was 7% so money in that investment, on average, grew faster than money in the first investment. "The raw question is as follows:  ""You will be recommending a purposed portfolio to an investment committee (my class). The committee runs a foundation that has an asset base of $4,000,000. The foundations' dual mandates are to (a) preserve capital and (b) to fund $200,000 worth of scholarships. The foundation has a third objective, which is to grow its asset base over time.""   The rest of the assignment lays out the format and headings for the sections of the presentation.  Thanks, by the way - it's an 8 week accelerated course and I've been out sick for two weeks. I've been trying to teach myself this stuff, including the excel calculations for the past few weeks." James Roth provides a partial solution good for stock picking but let's speed up process a bit, already calculated historical standard deviations: Ibbotson, very good collection of research papers here, examples below Books "The mathematics site, WolframAlpha, provides such data. Here is a link to historic p/e data for Apple. You can chart other companies simply by typing ""p/e code"" into the search box.  For example, ""p/e XOM"" will give you historic p/e data for Exxon. A drop-down list box allows you to select a reporting period : 2 years, 5 years, 10 years, all data.  Below the chart you can read the minimum, maximum, and average p/e for the reporting period in addition to the dates on which the minimum and maximum were applicable." Pub 527 my friend.  It gets depreciated. Table 1-1 on page 5. "So, there is no truly ""correct"" way to calculate return.  Professionals will often calculate many different rates of return depending on what they wish to understand about their portfolio.  However, the two most common ways of calculating multi-period return though are time-weighted return and money-weighted return. I'll leave the details to this good Investopeadia article, but the big picture is time-weighted returns help you understand how the stock performed during the period in question independent of how you invested it it.  Whereas money-weighted return helps you understand how you performed investing in the stock in question.  From your question, it appears both methods would be useful in combination to help you evaluate your portfolio. Both methods should be fairly easy to calculate yourself in a spread sheet, but if you are interested there are plenty of examples of both in google docs on the web." You can't get there from here.  This isn't the right data.  Consider the following five-year history:  2%, 16%, 32%, 14%, 1%.  That would give a 13% average annual return.  Now compare to -37%, 26%, 15%, 2%, 16%.  That would give a 4% average annual return.   Notice anything about those numbers?  Two of them are in both series.  This isn't an accident.  The first set of five numbers are actual stock market returns from the last five years while the latter five start three years earlier.  The critical thing is that five years of returns aren't enough.  You'd need to know not just how you can handle a bull market but how you do in a bear market as well.  Because there will be bear markets.   Also consider whether average annual returns are what you want.  Consider what actually happens in the second set of numbers:   But if you had had a steady 4% return, you would have had a total return of 21%, not the 8% that would have really happened.  The point being that calculating from averages gives misleading results.  This gets even worse if you remove money from your principal for living expenses every year.   The usual way to compensate for that is to do a 70% stock/30% bond mix (or 75%/25%) with five years of expenses in cash-equivalent savings.  With cash-equivalents, you won't even keep up with inflation.  The stock/bond mix might give you a 7% return after inflation.  So the five years of expenses are more and more problematic as your nest egg shrinks.  It's better to live off the interest if you can.  You don't know how long you'll live or how the market will do.   From there, it's just about how much risk you want to take.  A current nest egg of twenty times expenses might be enough, but thirty times would be better.  Since the 1970s, the stock market hasn't had a long bad patch relative to inflation.  Maybe you could squeak through with ten.  But if the 2020s are like the 1970s, you'd be in trouble. "Please note that the following Graham Rating below corresponds to five years: Earnings Stability (100% ⇒ 10 Years): 50.00% Benjamin Graham - once known as The Dean of Wall Street - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss. Buffett describes Graham's book - The Intelligent Investor - as ""by far the best book about investing ever written"" (in its preface). Graham's first recommended strategy - for casual investors - was to invest in Index stocks.  For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them.  For advanced investors, Graham described various ""special situations"". The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund. The last requires more than the average level of ability and experience. Such stocks are also not amenable to impartial algorithmic analysis, and require a case-specific approach. But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment. For example, given below are the actual Graham ratings for International Business Machines Corp (IBM), with no adjustments other than those for inflation. Defensive Graham investment requires that all ratings be 100% or more. Enterprising Graham investment requires minimum ratings of - N/A, 75%, 90%, 50%, 5%, N/A and 137%. International Business Machines Corp - Graham Ratings Sales | Size (100% ⇒ $500 Million): 18,558.60% Current Assets ÷ [2 x Current Liabilities]: 62.40% Net Current Assets ÷ Long Term Debt: 28.00% Earnings Stability (100% ⇒ 10 Years): 100.00% Dividend Record (100% ⇒ 20 Years): 100.00% Earnings Growth (100% ⇒ 30% Growth): 172.99% Graham Number ÷ Previous Close: 35.81% Not all stocks failing Graham's rules are necessarily bad investments. They may fall under ""special situations"". Graham's rules are also extremely selective. Graham designed and backtested his framework for over 50 years, to deliver the best possible long-term results. Even when stocks don't clear them, Graham's rules give a clear quantifiable measure of a stock's margin of safety. Thank you." "He is wrong.  Using Total Return (Reinvesting Dividend), from the peak in December 1999, it only took 6 years to recover.   You can check the data for free here. Make sure you choose ""Gross Index Level"".  ACWI Index is Developed Markets + Emerging Markets.  World Index is Developed Markets only." See the Moneychimp site. From 1934 to 2006, the S&P returned an 'average' 12.81%. But the CAGR was 11.26%.  I wrote an article Average Return vs Compound Annual Growth to address this issue.  Interesting that over time only a few funds have managed to get anywhere near this return, but the low cost indexer can get the long term CAGR minus .05% or so, if they wish. R = I ^ P R = return (2 means double)  I = (Intrest rate / 100) + 1 [1.104 = 10.4%] P = number of periods (7 years)  2 = 1.104 ^ 7 (you double your money in seven years with a yearly Intrest rate of 10.4%) I = R^(1/P) 1.104 = 2^(1/7) P = log(R) / log(I)  7 = log(2) / log(1.104) "It's easy for me to look at an IRA, no deposits or withdrawal in a year, and compare the return to some index. Once you start adding transactions, not so easy. Here's a method that answers your goal as closely as I can offer: SPY goes back to 1993. It's the most quoted EFT that replicates the S&P 500, and you specifically asked to compare how the investment would have gone if you were in such a fund. This is an important distinction, as I don't have to adjust for its .09% expense, as you would have been subject to it in this fund. Simply go to Yahoo, and start with the historical prices. Easy to do this on a spreadsheet. I'll assume you can find all your purchases inc dates & dollars invested. Look these up and treat those dollars as purchases of SPY. Once the list is done, go back and look up the dividends, issues quarterly, and on the dividend date, add the shares it would purchase based on that day's price. Of course, any withdrawals get accounted for the same way, take out the number of SPY shares it would have bought. Remember to include the commission on SPY, whatever your broker charges.  If I've missed something, I'm sure we'll see someone point that out, I'd be happy to edit that in, to make this wiki-worthy.  Edit - due to the nature of comments and the inability to edit, I'm adding this here. Perhaps I'm reading the question too pedantically, perhaps not. I'm reading it as ""if instead of doing whatever I did, I invested in an S&P index fund, how would I have performed?"" To measure one's return against a benchmark, the mechanics of the benchmarks calculation are not needed. In a comment I offer an example - if there were an ETF based on some type of black-box investing for which the investments were not disclosed at all, only day's end pricing, my answer above still applies exactly. The validity of such comparisons is a different question, but the fact that the formulation of the EFT doesn't come into play remains. In my comment below which I removed I hypothesized an ETF name, not intending it to come off as sarcastic. For the record, if one wishes to start JoesETF, I'm ok with it." "You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds.  That would be a reasonable approximation to market performance over a given time span. As for inflation data, just googling ""monthly inflation data"" gave me two pages with numbers that seem to agree and go back to 1914.  If you want to double-check their numbers you could go to the source at the BLS. As for whether any existing analysis exists, I'm not sure exactly what you mean.  I don't think you need to do much analysis to show that stock returns are different over different time periods." "Yes. The definition of unreasonable shows as ""not guided by or based on good sense."" 100% years require a high risk. Can your one stock double, or even go up three fold? Sure, but that would likely be a small part of your portfolio. Overall, long term, you are not likely to beat the market by such high numbers.  That said, I had 2 years of returns well over 100%. 1998, and 1999. The S&P was up 26.7% and 19.5%, and I was very leverage in high tech stock options. As others mentioned, leverage was key. (Mark used the term 'gearing' which I think is leverage). When 2000 started crashing, I had taken enough off the table to end the year down 12% vs the S&P -10%, but this was down from a near 50% gain in Q1 of that year. As the crash continued, I was no longer leveraged and haven't been since. The last 12 years or so, I've happily lagged the S&P by a few basis points (.04-.02%).  Also note, Buffet has returned an amazing 15.9%/yr on average for the last 30 years (vs the S&P 11.4%). 16% is far from 100%. The last 10 year, however, his return was a modest 8.6%, just .1% above the S&P."