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Financial Planning -> Stocks, Bonds etc. -> Investment Returns

Historic Investment Returns

The Canadian Consumer Price Index has been quite stable since 1992.  In the 30 years from 1963 to 1992, the average annual increase (inflation rate) was 5.7%.  During that time, there were 5 years where the inflation rate was over 10%, including 1981, when the rate was 12.4%.  1981 is also the year when Canadian 5 year mortgage rates were over 21% for a couple of months.  The average 5 year mortgage rate from 1963 to 1992 was 11.03%.

Historical returns on $1,000 invested in stock markets and other investments
to December 31, 2014

Type of Investment 1 year 5 years 10 years 20 years Since
Dec 31, 1984
30 years
50 years Since
Dec 31, 1949
65 years
Avg
Annual
Return
Value Avg
Annual
Return
Value Avg
Annual
Return
Value Avg
Annual
Return
Value Avg
Annual
Return
Value Avg
Annual
Return
Value Avg
Annual
Return
Value
Cdn 3 month T-bills 0.9% $1,009 0.9% $1,044 1.8% $1,194 2.9% $1,779 4.8% $4,071 6.1% $19,113 5.3% $27,861
Cdn Govt Bonds 1 to 3 year 1.1% $1,011 1.2% $1,063 2.1% $1,236 3.4% $1,967 5.2% $4,628 6.5% $22,975 5.8% $38,073
Cdn Govt Bonds over 10 years 2.6% $1,026 2.9% $1,154 3.5% $1,417 4.8% $2,562 6.4% $6,434 7.5% $36,701 6.7% $67,506
S&P/TSX (Cdn) Index (formerly TSE300) 7.4% $1,074 4.5% $1,246 4.7% $1,582 6.7% $3,642 5.9% $5,639 n/a n/a n/a n/a
Nikkei 225 TRI © Nikkei Inc. in Cdn$ (2) 4.2% $1,042 8.4% $1,496 4.0% $1,473 -1.2% $789 4.5% $3,761 n/a n/a n/a n/a
S&P 500 (US) Index in Cdn$ 24% $1,240 17.9% $2,274 7.3% $2,019 9.0% $5,562 10.9% $22,483 10.1% $121,405 11.6% $1,233,632
European stocks in Cdn$ 2.9% $1,029

8.1%

$1,477

4.8%

$1,601

7.2%

$3,980

11.2% $23,879 n/a n/a n/a n/a
Emerging markets stocks in Cdn$ (1) 7.1% $1,071

4.2%

$1,231

8.4%

$2,236

5.1%

$2,728

n/a n/a n/a n/a n/a n/a
Canadian Consumer Price Index All Items 1.5% $1,015 1.6% $1,084 1.7% $1,181 1.9% $1,452 2.4% $2,055 4.1% $7,559 3.6% $10,217

Value is the value at the end of the period, in Canadian$, of $1,000 invested at the beginning of the period.
n/a = not available

We added the column for returns since December 31, 1984 because late 1984 is the earliest data that we have for the S&P/TSX index.

(1)  For Emerging Markets, the earliest data that we have is December 31, 1987.  The average annual return in Canadian dollars for emerging markets for the 27 years from 1987 is 11.0%.  $1,000 invested at the end of 1987 would have a value of $16,804 Canadian at the end of 2014.

(2)  The Nikkei 225 Total Return Index (TRI) year end factors in yen are used with the permission of Nikkei Inc. to calculate the above results.  Recent Nikkei year end factors are available on the Nikkei website.  The earliest data that we have is December 1979, when the Nikkei 225 TRI was started.  The average annual return in yen for the Nikkei 225 TRI for the 35 years from 1979 to 1984 is 4.0% (6.0% when converted to Cdn$).  1,000 yen invested at the end of 1979 would have a value of 3,909 yen at the end of 2014.  $1,000 Cdn invested at the end of 1979 would have a value of $7,763 at the end of 2014.

* Note that the average annual return on bonds is the average yield if the bonds were held to maturity.

The change in the Canadian dollar has had a significant effect on some of the above results.  As an example, see the following 1 year results in US$:

S&P 500 13.7% $1,137
European stocks -5.7% $943
Emerging markets stocks    -1.8% $982

The 1 year return for the Nikkei 225 TRI © Nikkei Inc. in yen is 9.0%.

Sources of data used to calculate the above returns:
Bank of Canada Rates and Statistics - Interest Rates, Standard & Poor's, Statistics Canada Consumer Price Index, Yahoo, Morgan Stanley, UBC Pacific Exchange Rate Service.
The returns are the total returns with dividends or interest reinvested.
All values and returns are in Canadian $

Recommended Stocks

See our article on recommended stocks for registered or non-registered accounts - these suggested portfolios are good for novice investors.

Tip:  Calculate your own investment returns using our Investment Return Calculator.

 

Revised: January 25, 2015

 

 

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