Stock Market vs Inflation Calculator — what your money really earned
See how much a stock market investment grew after inflation. Pick a market, a start and end year and an amount: the calculator shows the nominal value, the real value in purchasing power, the real annual return, the worst real drawdown and how long it took to recover. Eight markets since 1970, a lump sum or monthly investing, dividends and fees included. Data through December 2025.
Growth — nominal vs real
Real drawdown — pain while you wait
How far the index sat below its previous high, after inflation. The deepest dip and the years to get back to that peak in real terms.
Year by year — real return
Bars: return after inflation for each calendar year. Dots: that year's inflation.
Heat map — every start year × every holding period
Each cell is the real (after-inflation) yearly return for a lump sum invested in January of the year on the horizontal axis and held for the number of years on the vertical axis. The outlined cell is your current selection. Red areas show when, and for how long, the market lost to inflation.
Markets compared — same years
Real return per year, in each market's own currency against its own inflation. Markets with no data for the chosen start year are left out.
Asset classes — US, same years
US stocks (S&P 500 with dividends), 10-year Treasury bonds, 3-month T-bills, gold and US house prices, in US dollars against US inflation.
Lost decades — 10 years with nothing to show
The numbers — year by year
Guide — how to read your real return
Choose one of eight stock markets, the January you invest and the December you stop. A preset loads a famous period in one click.
Lump sum invests everything on day one. Monthly investing adds the same amount every month, the way most people invest from a salary.
Keep reinvest dividends on for an honest long-run figure, and pick the yearly fund cost of the ETF or fund you would really use.
The big number is what the investment is worth in the money of your start year. The real CAGR is the growth per year after inflation.
The heat map and the Worst timing tab show every possible start year, so you see how much depended on luck.
What each view answers
- blue line
- the number on your statement
- green line
- the same money in start-year prices
- orange line
- the same amount kept as cash, losing value to inflation
- drawdown
- how far the market fell below its last real high
- recovery
- years until that real high came back
- year bars
- every calendar year after inflation
- heat map
- every start year × holding period at once
- worst timing
- the worst, median and best start for a holding period
- lost decades
- ten-year windows that lost to inflation
- markets
- all eight markets over the same years
- assets
- US stocks, bonds, T-bills, gold and houses
- table
- every year, exportable as CSV
Stock market returns vs inflation, explained
Every stock market chart you see is a nominal chart: it shows the number going up, in money that was losing value the whole time. Inflation is the difference between that number and what it can buy. Over long periods the gap is huge. The S&P 500 with dividends returned about 11% a year from 1970 to 2025, but US prices rose about 4% a year over the same period, so the real return was close to 7% a year. Ten thousand dollars became about 3.6 million on paper, worth about 416,000 dollars in 1970 prices. Both numbers are true; only the second one tells you how much richer you became.
How to calculate an inflation-adjusted (real) return
To turn a nominal amount into purchasing power, divide it by how much prices rose since you started:
real value = nominal value ÷ (CPI at the end ÷ CPI at the start)
For a yearly figure, divide the growth factors, do not subtract the percentages:
real return = (1 + nominal return) ÷ (1 + inflation) − 1
An 8% return with 3% inflation is a real return of 1.08 ÷ 1.03 − 1 = 4.85%, not 5%. The shortcut looks harmless for one year, but it overstates the result more and more as inflation rises; in 1980, with US inflation at 12.5%, it was off by more than a percentage point a year. The calculator always uses the division form, year by year.
Why dividends and costs matter so much
A stock index like the Nikkei 225 or the FTSE 100 is a price index: it ignores dividends. Over decades, reinvested dividends account for a large part of the total return; for the S&P 500 since 1970 they add about three percentage points a year (11.1% with dividends against 8.0% without). Fund costs work the other way: a 1% yearly fee on a 7% real return takes away about a seventh of the gain every year, and over 30 years roughly a quarter of the final value. Switch dividends off or raise the cost to see the effect on your own period.
Lump sum or monthly investing (dollar-cost averaging)
A lump sum spends more time in the market and, because markets rise more often than they fall, usually ends with more. Monthly investing matches how most people actually save, and it spreads the entry price so one unlucky month cannot decide the outcome. Because the two modes put money in at different times, compare them on the real return per year. For monthly investing the calculator reports a money-weighted return (an internal rate of return on every monthly deposit), the same method a broker uses for a savings plan. Monthly growth is spread evenly within each calendar year, because the data are yearly.
Real drawdowns and lost decades
A drawdown is the fall from a previous high to the following low. Measured after inflation, drawdowns are deeper and recoveries take longer, because prices keep rising while you wait. A lost decade is a ten-year window in which the investment ended with less purchasing power than it started with. The best-known examples:
- United States, 2000–2009: the dot-com crash and the financial crisis in one decade. The S&P 500 with dividends lost about 29% of its real value over the ten years, and its real low in 2008 was 43% below the start.
- United States, the 1970s: positive nominal returns, but double-digit inflation; money invested in January 1973 fell almost 50% in real terms by the end of 1974 and only got back to its real starting value in 1984.
- Japan after 1989: the Nikkei 225 peaked at 38,916 in December 1989 and only passed that level in nominal terms in 2024, more than three decades later. With dividends and Japan's low inflation, money invested in January 1990 regained its real value only in the early 2020s.
Does the stock market always beat inflation?
Over long periods, broad stock markets have beaten inflation more reliably than cash or bonds; that is the main argument for owning them. But "in the long run" carries a lot of weight. Open the heat map: short holding periods are full of red, and even 15- to 20-year periods have lost to inflation in some markets. The Worst timing tab counts how often that happened for any holding period you pick. It is history, not a forecast, but it is a better guide than an average.
Why cash is risky over long periods
Cash is the only asset whose nominal value never falls, which is exactly why its loss goes unnoticed. At 3% inflation, money in a drawer loses about a quarter of its buying power in ten years and half in about 23 years. The orange line on the growth chart shows that loss for your own period.
Data and method
| Market | Series | From | Inflation |
|---|---|---|---|
| S&P 500 | Total return with actual yearly dividends (price only when dividends are off) | 1970 | US CPI-U, December to December |
| MSCI World | Net total return in USD | 1987 | US CPI-U |
| EURO STOXX 50 | Price index + estimated 3.3% dividend yield | 1987 | Euro area HICP; before 1996 the five largest economies |
| FTSE 100 | Price index + estimated 3.7% (before 1984: back-calculated) | 1970 | UK CPI |
| Nikkei 225 | Price index + estimated 1.5% | 1970 | Japan CPI |
| S&P/TSX Composite | Price index + estimated 2.8% | 1970 | Canada CPI |
| All Ordinaries | Price index + estimated 4.2% (franking credits not included) | 1970 | Australia CPI |
| BSE Sensex | Price index + estimated 1.4% | 1980 | India CPI |
Returns are calendar-year, from the last close of the previous December to the last close of the year. Index closes come from the index providers via public year-end records; S&P 500 dividends and the US bonds, T-bills, gold and house-price series come from Aswath Damodaran's historical returns dataset (NYU Stern). US inflation is the official December-to-December CPI-U change. For the other countries, December levels are estimated from World Bank and Eurostat yearly averages. Every market is measured in its own currency against its own inflation, so the comparison answers "what did a local investor earn", not which market was best for a dollar investor. Figures are before taxes. Data run through December 2025.
Share or embed a scenario
The address bar always holds the current scenario, for example ?market=US&amount=10000&from=2000&to=2025. Optional: mode=dca or mode=worst&hold=15, fee=0.5, div=0. Markets: US, WORLD, EU, UK, JP, CA, AU, IN. All calculations run in your browser; nothing you type is sent anywhere.
This page shows historical data for education, not investment advice. Past returns do not predict future returns.
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