Which Investments Have the Highest Historical Returns? (2024)

The U.S. stock market has long been considered the source of the greatest returns for investors, outperforming all other types of investments including financial securities, real estate, commodities, and art collectibles over the past century.

Whether stocks are the best investment depends on the historical timeframe in which returns are studied. For individual investors, choosing where to invest for the highest returns also depends on their own investment horizons. The higher volatility of stock prices means that shorter investment time periods carry greater risk.

Key Takeaways

  • The U.S. stock market is considered to offer the highest investment returns over time.
  • Higher returns, however, come with higher risk.
  • Stock prices typically are more volatile than bond prices.
  • Stock prices over shorter time periods are more volatile than stock prices over longer time periods.
  • During shorter time periods, the market doesn't get the chance to recover from the economic events and conditions that can affect prices and returns.

Long-Term Returns From Stocks

The stock market has proven that it produces higher gains over long time periods compared to bonds. For example, one hundred dollars invested in the (S&P 500) in 1928 would have been worth more than $700,000 by 2021. In comparison, the same $100 invested in 10-year Treasuries for the same time period would have been worth only a little more than $8,500.

Stock Holding Periods Matter

Of course, not everyone holds the same stocks for many decades. Plenty of people lose money in the market in the shorter term. The key to capturing high returns from the U.S. stock market is to invest for the long term. That means letting your money remain invested while waiting out short-term volatility.

For example, the S&P 500 is far more volatile over any 12-month period than longer term. That means you face a greater risk of losing money during a period of one year (should you sell). Stocks tend to fall sharply just prior to and during economic recessions. Time the market poorly and your losses could be painful.

Stretch the holding period from 12 months to five years and you’re more likely to make money. Between 1945 and 1995, only a few five-year periods would have resulted in a loss in the S&P 500. A 10-year holding period performed even better, with returns averaging about 13%—and zero negative returns. So the longer the holding period, the more likely you are to make money.

Have a look at these numbers. From 1928 to 2021, treasury bonds rose in 76 of those years while stocks rose in 69. This reflects the short-term volatility the stock market experiences despite rewarding investors with higher returns than the bond market over the long term.

The shorter the holding period, the greater the risk of losing money in more volatile markets.

Stocks vs. Commodities in Recent Years

Despite the burst of the Dotcom Bubble in 2001 and the global financial crisis of 2008, stocks have produced solid gains over the past two decades, as well.

However, from 1999 to 2018, the S&P 500 was outperformed by real estate investment trusts (REITs), gold, and oil. During that time, REITs gained 9.9% a year, gold gained 7.7%, and oil gained 7%. The S&P 500 rose 5.6% per year.

These numbers point not only to the challenge of volatility but perhaps also to the wisdom of diversification.

Stocks vs. Housing

Many people consider a home an excellent long-term investment. Home prices have risen steadily over time, particularly in recent decades and most dramatically during the build-up of the housing bubble that peaked in 2005.

However, over the longer term, the return is less impressive. Between 1890 and 2015, after accounting for inflation, U.S. home prices rose less than 1% annually. That's just a fraction of the rise in the Dow Jones Industrial Average.

Why Does the U.S. Stock Market Offer Solid Returns Over Time?

The stock market represents U.S. companies that are committed to building profits and sharing them with their investors. In addition, the U.S. upholds an economic system that allows the business community to thrive. As public businesses grow, so should the returns offered to long-term investors.

What's an Example of a Company With Good Historical Returns?

Famously, Warren Buffett has been a committed long-term investor in the U.S. stock market through his company, Berkshire Hathaway. From 1964 to 2021, his stock market investment choices have returned an astonishing 3,641,613%.

How Does Being a Long-Term Investor Help Build Returns?

A key to building high stock market returns is to let your portfolio weather the periods of price drops due to economic events that are bound to happen over time. Although portfolio values can decrease, investors won't realize an actual loss during these periods unless they sell their investment(s). Simply by holding on to investments during rough market patches, you give them the opportunity to recover to previous levels and grow even more in value.

Which Investments Have the Highest Historical Returns? (2024)


Which Investments Have the Highest Historical Returns? ›

The U.S. stock market is considered to offer the highest investment returns over time. Higher returns, however, come with higher risk. Stock prices typically are more volatile than bond prices. Stock prices over shorter time periods are more volatile than stock prices over longer time periods.

Which investment has highest returns? ›

Treasury Bills. The Government of India issues Treasury Bills to raise funds for up to 365 days. It is considered an investment with the best returns. Since the government gives these, they are considered very safe.

What investments have the highest annual return? ›

Overview: Best investments in 2024
  1. High-yield savings accounts. Overview: A high-yield online savings account pays you interest on your cash balance. ...
  2. Long-term certificates of deposit. ...
  3. Long-term corporate bond funds. ...
  4. Dividend stock funds. ...
  5. Value stock funds. ...
  6. Small-cap stock funds. ...
  7. REIT index funds.

Which investment has historically earned the highest return? ›

“Historically, real estate has always been the best-performing asset class,” notes Patrick Donoghue, Vice President, Market Risk at Groundfloor Finance. “One of the best ways to invest is through private capital real estate deals.

What stock has the best 10 year return? ›

Best-performing stocks over the past 10 years
  1. Nvidia (NVDA) ...
  2. Advanced Micro Devices (AMD) ...
  3. Super Micro Computer (SMCI) ...
  4. Green Brick Partners (GRBK) ...
  5. Broadcom (AVGO) ...
  6. Fair Isaac Corp. ...
  7. Monolithic Power Systems (MPWR) ...
  8. Builders FirstSource (BLDR)
Feb 28, 2024

How to invest $100,000 for quick return? ›

If you want to put $100,000 into a short-term investment, here are six options worth considering:
  1. High-Yield Savings Account. ...
  2. Money Market Funds. ...
  3. Cash Management Accounts. ...
  4. Short-Term Corporate Bonds. ...
  5. No-Penalty Certificates of Deposits (CD) ...
  6. Short-term U.S. Government Bonds.
Mar 7, 2024

What is the safest investment with the highest return? ›

Here are the best low-risk investments in April 2024:
  • High-yield savings accounts.
  • Money market funds.
  • Short-term certificates of deposit.
  • Series I savings bonds.
  • Treasury bills, notes, bonds and TIPS.
  • Corporate bonds.
  • Dividend-paying stocks.
  • Preferred stocks.
Apr 1, 2024

Where can I get a 10% return? ›

Summary of the best investments with 10% ROI
  • Private credit.
  • Individual stocks.
  • Real estate.
  • Fine art.
  • Debt.
  • A business.
  • Private startups.
  • Cryptocurrencies.
Jan 4, 2024

What investment returns 10% annually? ›

The average stock market return is about 10% per year, as measured by the S&P 500 index, but that 10% average rate is reduced by inflation. Investors can expect to lose purchasing power of 2% to 3% every year due to inflation.

How do I make 10% on my money? ›

Investments That Can Potentially Return 10% or More
  1. Stocks.
  2. Real Estate.
  3. Private Credit.
  4. Junk Bonds.
  5. Index Funds.
  6. Buying a Business.
  7. High-End Art or Other Collectables.
Sep 17, 2023

What is the most successful stock of all time? ›

1. Berkshire Hathaway Inc. ($634,440)
  • Berkshire Hathaway is the holding company of billionaire investor Warren Buffett. ...
  • Notable companies under the Berkshire umbrella include GEICO Auto Insurance and Helzberg Diamonds. ...
  • Its brands include well-known Russell Stover, Lindt, and Ghirardelli.
3 days ago

What is the next big thing to invest in? ›

Next Big Thing in Investing: Artificial Intelligence

The tech space is always worth watching when it comes to seeking out the next big thing in investing. Right now it seems that artificial intelligence (AI) is driving that bus and will be for the foreseeable future.

What is the best performing asset class of all time? ›

The best performing Asset Class in the last 30 years is US Technology, that granded a +14.30% annualized return. The worst is US Cash, with a +2.27% annualized return in the last 30 years. Asset Classes can be easily replicated by ETFs.

Which stock will double in 3 years? ›

Stock Doubling every 3 years
S.No.NameCMP Rs.
1.Guj. Themis Bio.384.95
2.Refex Industries139.05
3.Tanla Platforms985.45
4.M K Exim India75.90
9 more rows

What stocks outperform the S&P 500? ›

Stocks That Will Outperform the S&P 500 in 2024 According to Reddit
  • Rocket Lab USA Inc (NASDAQ:RKLB) ...
  • Twist Bioscience Corp (NASDAQ:TWST) ...
  • Tecnoglass Inc (NYSE:TGLS) ...
  • Paramount Global Class B (NASDAQ:PARA) ...
  • SoFi Technologies Inc (NASDAQ:SOFI) ...
  • Ulta Beauty Inc (NASDAQ:ULTA) ...
  • Pfizer Inc (NYSE:PFE) ...
  • Tesla Inc (NASDAQ:TSLA)
Jan 25, 2024

What is the number one stock in the world? ›

Berkshire Hathaway Inc. is a US-based multinational investment firm with the most expensive stock in the world. It was originally a textile company, but was bought over by Warren Buffett in 1965 and is now a holding company for his investments.

Where can I get 12% interest on my money? ›

Alternative High-Yield Savings Options
Alternative AccountAPY
Khan Bank 12-month Online Term Deposit12.4%
Crypto.com EarnUp to 14.5%
CoinLoanUp to 12.3%
NexoUp to 12%
1 more row
2 days ago

How do you get 12 percent return on investment? ›

How To Get 12% Returns On Investment
  1. Stock Market (Dividend Stocks) Dividend stocks are shares of companies that regularly pay a portion of their profits to shareholders. ...
  2. Real Estate Investment Trusts (REITs) ...
  3. P2P Investing Platforms. ...
  4. High-Yield Bonds. ...
  5. Rental Property Investment. ...
  6. Way Forward.
Jul 20, 2023

Which investment gives highest return with low risk? ›

Best Low-Risk Investments With High Returns
  • High-Interest Savings Account. ...
  • Annuities. ...
  • Money Market Mutual Fund. ...
  • Municipal Bonds. ...
  • Certificate of Deposits. ...
  • Debt-focused Unit Linked Insurance Plans (ULIPs) ...
  • Treasury Bills. ...
  • Fixed Deposits.
Jan 29, 2024

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