Historical 20-Year S&P 500 Market Returns and P/E Ratio Dynamics - 1919-2025

Oct 13, 2026

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This document provides a comprehensive longitudinal analysis of S&P 500 market performance, focusing on the relationship between 20-year rolling annualized returns and fluctuations in the P/E10 ratio from 1919 to 2025. It examines 107 historical periods to demonstrate how starting P/E valuations influence long-term investment outcomes. By categorizing data into deciles based on initial P/E10 levels, the report highlights the inverse correlation between starting valuation multiples and subsequent total returns. The analysis utilizes detailed statistical tables and graphical visualizations to illustrate cyclical trends, showing how periods of expanding or contracting P/E ratios coincide with significant shifts in annualized investor returns over two-decade horizons. This quantitative study serves as an essential resource for understanding how market valuation metrics serve as predictive indicators for long-term equity growth potential.

LanguageEnglish

CategoryGeneral

FormatPDF

Pages1

AccessFree to download

Analysis of 20-Year Rolling Returns

Historical Performance Trends (1919-2025)

Impact of Starting P/E10 Ratios on Long-Term Growth

Decile-Based Return Comparison

FAQs

What is the primary relationship shown between the starting P/E10 ratio and long-term stock returns?

The document illustrates that 20-year annualized returns are significantly influenced by the starting P/E10 ratio; generally, lower starting valuations are associated with higher subsequent long-term returns, while higher starting valuations often precede lower long-term returns.

What dataset is used for this 20-year rolling return analysis?

The analysis covers S&P 500 total return data, including dividends, spanning 107 rolling 20-year periods from 1919 to 2025.

How is the P/E10 ratio defined in this report?

The P/E10 ratio is defined as the stock price based upon the average 10-year real earnings per share (EPS).

Oct 13, 2026

Upload by Jake