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Historical Investment Returns on Stocks, Bonds, T-Bills

The Canadian Consumer Price Index has been quite stable since 1992, but increased significantly in 2021 and 2022, less so in 2023. 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%.

TaxTips.ca - Historical before-tax returns on $1,000 Cdn invested in stock markets and other investments to December 31, 2023
Type of Investment	1 year		5 years		10 years		20 years		Since Dec 31, 1979 44 years		50 years		Since Dec 31, 1949 74 years
Type of Investment	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	4.8%	$1,048	1.9%	$1,098	1.3%	$1,142	1.6%	$1,382	5.0%	$8,444	5.4%	$13,868	4.8%	$31,541
Cdn Govt Bonds 1 to 3 year *	4.3%	1,043	1.9%	1,101	1.5%	1,160	1.9%	1,460	5.3%	9,710	5.7%	15,816	5.2%	43,699
Cdn Govt Bonds over 10 years *	3.3%	1,033	2.2%	1,112	2.2%	1,239	3.0%	1,798	6.3%	14,505	6.6%	24,617	6.1%	81,537
S&P/TSX (Cdn) Composite TRI (formerly TSE300 Total Return) (3)	11.2%	1,112	11.1%	1,694	7.5%	2,068	7.8%	4,456	8.8%	40,146	9.2%	81,350	n/a	n/a
Nikkei 225 TRI © Nikkei Inc. in Cdn$ (2)	19.2%	1,192	6.8%	1,392	8.7%	2,303	6.3%	3,409	6.7%	17,166	n/a	n/a	n/a	n/a
S&P 500 (US) TRI in Cdn$	23.3%	1,233	15.0%	2,009	14.5%	3,873	9.4%	6,007	12.1%	154,852	11.8%	266,182	11.8%	3,853,444
European stocks Gross TRI in Cdn$	17.8%	1,178	9.1%	1,543	7.1%	1,977	6.0%	3,207	10.1%	68,137	10.5%	146,666	n/a	n/a
Emerging markets stocks Gross TRI in Cdn$ (1)	7.7%	1,077	3.4%	1,184	5.3%	1,679	6.9%	3,793	n/a	n/a	n/a	n/a	n/a	n/a
Canadian Consumer Price Index All Items (4)	3.4%	1,034	3.5%	1,187	2.6%	1,290	2.2%	1,534	3.2%	3,957	3.9%	6,704	3.5%	12,991

Value is the value at the end of the period, of $1,000 Cdn invested at the beginning of the period. All values and returns are in Canadian $.
n/a = not available
TRI = Total Return Index
The returns are the total returns with dividends or interest reinvested.

The column for returns since December 31, 1979 reflects the earliest data we have for the Nikkei 225 Index.

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

(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 36 years from 1987 to 2023 is 9.5%. $1,000 invested at the end of 1987 would have a value of $26,340 Canadian at the end of 2023.

(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 43 years from 1979 to 2023 is 5.1%. 1,000 yen invested at the end of 1979 would have a value of 8,936 yen at the end of 2023.

(3) Some of the earlier S&P/TSX Composite Index Total Return data is from Libra Investment Management Inc., sourced from the Canadian Institute of Actuaries. Data for recent years is from the Financial Times website. Historical data is also available from Investing.com.

(4) Now using December 2023 CPI of 158.3. The November 2023 CPI was 158.8. The Annual CPI increase is not the average increase per year, but is the increase from December to December.

Exchange Rate re Above Returns

The change in the Canadian dollar can have a significant effect on some of the above results. See the following 1 year results in US$:

S&P 500	26.3%	$1,263
European stocks	20.7%	1,207
Emerging markets stocks	10.3%	$1,103

The 2023 1 year return for the Nikkei 225 TRI © Nikkei Inc. in yen is 31.0%.

Your Investment Returns

If you have brokerage statements which show your return for the past year for US$ accounts, please note that this will be the return on the US$ amounts, not the return when your investments are converted to Canadian dollars. You can use our Investment Return Calculator to calculate your return in Cdn$, by converting the beginning balance, deposits and withdrawals, and ending balance to Cdn$ using the exchange rate in effect on each of those dates.

Other sources of data used to calculate the above returns:

Bank of Canada Rates and Statistics - Interest Rates for T-bills and bonds

Standard & Poor's

Statistics Canada Consumer Price Index

UBC Pacific Exchange Rate Service.

Taxation of Interest vs Dividends vs Capital Gains

The above table shows before-tax returns. The big difference between the returns on the S&P 500 and bonds or T-bills becomes even bigger after tax. The bond or T-bill interest is 100% taxable every year. Most of the return on the S&P 500 stocks would be capital gains, which is only 50% taxable, and is not taxable until the investment is sold. The dividends from the S&P/TSX index stocks are normally eligible for the enhanced dividend tax credit for Canadian stocks, which results in a very low tax rate. See our article on tax treatment of income from different types of investments.

See our Investment Income Tax Calculator which shows the big difference in taxes payable on different types of investment income

Recommended Stocks

See our article on recommended stocks for registered or non-registered accounts - these suggested portfolios are good for novice investors, or investors who don't have the time or the interest to do their own research.

Risk

Investing is not without risk, and the market has many ups and downs. See our article on Risk as it Relates to Investing for more information.

Tax Tips:

Calculate your own investment returns using our Investment Return Calculator.

Use our Investment Income Tax Calculators to compare taxes on different types of investment income.

See our Tax Rate Tables to compare marginal tax rates on different types of investment income.

Revised: September 20, 2024