During this period, the S&P 500 (excluding dividends) averaged 9.25%, and inflation averaged 3.84%, for an
inflation-adjusted return of 5.21% (see note below).    View Data as a Table | Monthly Inflation Data

Year Inflation S&P 500 Returns* 2008 4.19%* -37.88% 2007 2.85% 3.53% 2006 3.23% 13.62% 2005 3.39% 3.00% 2004 2.68% 8.99% 2003 2.27% 26.38% 2002 1.59% -23.37% 2001 2.83% -13.04% 2000 3.38% -10.14% 1999 2.19% 19.53% 1998 1.55% 26.67% 1997 2.34% 31.01% 1996 2.93% 20.26% 1995 2.81% 34.11% 1994 2.61% -1.54% 1993 2.96% 7.06% 1992 3.03% 4.46% 1991 4.25% 26.31% 1990 5.39% -6.56% 1989 4.83% 27.25% 1988 4.08% 12.40% 1987 3.66% 2.03% 1986 1.91% 14.62% 1985 3.55% 26.33% 1984 4.30% 1.40% 1983 3.22% 17.27% 1982 6.16% 14.76% 1981 10.35% -9.73% 1980 13.58% 25.77% 1979 11.22% 12.31% 1978 7.62% 1.06% 1977 6.50% -11.50% 1976 5.75% 19.15% 1975 9.20% 31.55% 1974 11.03% -29.72% 1973 6.16% -17.37% 1972 3.27% 15.63% 1971 4.30% 10.79% 1970 5.84% 0.10% 1969 5.46% -11.36% 1968 4.27% 7.66% 1967 2.78% 20.09% 1966 3.01% -13.09% 1965 1.59% 9.06% 1964 1.28% 12.97% 1963 1.24% 18.89% 1962 1.20% -11.81% 1961 1.07% 23.13% 1960 1.46% -2.97% 1959 1.01% 8.48% 1958 2.73% 38.06% 1957 3.34% -14.31% 1956 1.52% 2.62% 1955 -0.28% 26.40% 1954 0.32% 45.02% 1953 0.82% -6.62% 1952 2.29% 11.78% 1951 7.88% 16.35% 1950 1.09% 21.68%            [view data as a chart] * Inflation for 2008 is the average through November (CPI for December has not been released). * Excluding dividends Note: Most people estimate the inflation-adjusted rate of return (often called the real rate of return) by subtracting the inflation rate from the return. However, the correct formula looks like this: where k is the real rate of return, r is the nominal return and i is the rate of inflation. Thus, the simple estimate of the real rate return would be 5.41% (9.25% minus 3.84%). The true real rate, however, is 5.21%. The S&P 500 returns are based on data from Yahoo! Finance.