The above charts show the cumulative yearly return of the S&P500 as each year progresses. Values are nominal (not adjusted for inflation), and represent adjustments for stock splits and dividends. Data is from Yahoo Finance.
Compare S&P 500 Year-to-Date Returns Since 1950
Markets don’t repeat, but they do rhyme. The S&P 500 has seen blistering bull runs, stomach-churning crashes, and plenty of dull middle ground since 1950. When you line up each year side by side, today’s market noise fades a bit. 2025 looks a lot less like uncharted territory, and a lot more like one of those ordinary, occasionally-overvalued, mostly-optimistic stretches investors have seen dozens of times before.
From 1950 through 2024, the S&P 500 has averaged roughly a 9.3% return by year end, though the path to get there is rarely smooth. Historical data shows strong mean reversion: years that start poorly often recover, while years that begin hot tend to cool off by mid-year. Comparing current performance to historical patterns provides valuable context for whether today’s market strength (or weakness) is unusual or entirely par for the course.
What does this say about Valuation?
Short-term returns don’t cause valuation; they reveal it. If prices run faster than earnings, multiples expand and the market gets pricier (overvalued); if earnings outrun prices, multiples compress and valuations improve. To see which is happening now, compare this year’s YTD move with changes in earnings, margins, and rates. Our broader valuation models — the Buffett Indicator, Shiller CAPE, Price-to-Sales, and Earnings Yield Gap — show whether 2025’s gains are rising fundamentals or just stretching the rubber band.
