US stocks returned about 10.4% a year between 1996 and 2025, against 8.5% for a global portfolio of developed and emerging markets. At that pace $10,000 invested in January 1996 became about $195,000 in US stocks and about $115,000 in the global portfolio. Most of that gap opened after 2013. Before that, the rest of the developed world was ahead for years, and sector leaders changed every decade.

This is education, not investment advice. Past returns do not predict future returns, and every figure below is before fees and taxes.

The short version

• From 1996 to 2025, US stocks returned 10.4% a year, a global portfolio 8.5%, Europe 7.8%, emerging markets 7.2%, Japan 3.3% and US cash 2.3% (US dollars, before fees and taxes).
• The US lead was not constant. Over each 10-year period ending between 2006 and 2012, developed markets outside the US did better. Since 2014 the US has led by 3 to 8 points a year.
• Spreading money across regions did not protect against the 2008 crash: global stocks fell 54% from peak to trough, US stocks 50%. Only holding cash or similar assets reduced the fall (about 41% for a portfolio that was 30% cash).
• No US sector led two decades in a row in our data. Across 49 industries, the best performers of 1996 to 2005 and 2006 to 2015 were mostly different from the best of the next decade.
• Small, cheaply priced companies beat the whole market in all four regions we tested, but they lagged for a full decade in the US.
• Most individual stocks do not beat treasury bills. Studies of global stocks find a small share of companies account for all the wealth created.

Thirty years in one table

We use monthly total returns (price changes plus dividends) from the Kenneth French Data Library, which builds regional stock indices from Bloomberg data and a US index from the University of Chicago's CRSP database. All figures are in US dollars. "Global" is our own mix of 90% developed markets and 10% emerging markets, rebalanced monthly, a rough stand-in for a global all-country fund. Returns are before any fund fees.

Two points stand out. First, every stock market had at least one fall of 50% or more, so anyone invested in stocks for 30 years lived through at least one period in which half the money disappeared on paper. Second, cash in US dollars grew less than US consumer prices (2.5% a year over the same period), so its real return was slightly negative, about -0.2% a year. Its value was in staying stable, not in growing.

The US lead came late

A 30-year average hides how returns arrived. The chart below compares US stocks with developed markets outside the US, over each 10-year period ending in December.

Someone who started investing in 2000 and looked back after ten years saw US stocks lose ground to the rest of the developed world, and the worst 10-year stretch in the US was a loss of 2.5% a year (the period ending February 2009). Someone who started in 2010 saw the opposite. The split by decade shows the same pattern.

The US led only in the third decade, and that decade is the reason for its 30-year lead. Over 1996 to 2005 Europe did better than the US, and over 2006 to 2015 the US returned only 7.5% a year. Over 2016 to 2025 the US returned 14.7% a year. If a region is "better" depends largely on which years you pick, which is a reason to avoid concluding that one decade's winner will win the next.

Does mixing regions reduce risk?

We tested some simple mixes, rebalanced monthly, over the same 30 years.

Mixing the US with the rest of the world did not reduce the size of the worst fall, because in 2008 stock markets everywhere fell together (the US lost 37% in 2008, Europe 46%, emerging markets 54%). Their volatility was about the same as the US on its own. What did reduce risk was holding some cash: each 10% in cash cost about 0.5 to 0.7 points of return a year in this period and cut the worst fall by about 4 points. In our data, regional mixing mattered mostly for which decade a portfolio did well in, not for how deep the falls were.

Sectors rotate

The US results above are driven by which industries did well. We split US stocks into 12 industries and measured each over three decades.

Technology (business equipment, which includes computers, software and electronics) was the best sector over all 30 years at 13.0% a year, but it was only ninth best of 12 in the first decade (7.8%). Energy led from 1996 to 2005 and then fell near the bottom (3.8% a year from 2006 to 2015). Finance returned 14.0% a year in the first decade and 1.5% in the second. Consumer staples led the middle decade and were second last in the third.

We also tested this across 49 narrower US industries. The industries that did best in one decade tended to do worse in the next: the correlation between consecutive decades' returns was -0.36 (1996 to 2005 versus 2006 to 2015) and -0.37 (2006 to 2015 versus 2016 to 2025). Only 2 of the top 10 industries from 1996 to 2005 were again in the top 10 in 2006 to 2015, and none of the top 10 from 2006 to 2015 were in the top 10 in 2016 to 2025. This is a historical pattern in one market, not a rule, but it gives a reason to be careful when buying a sector after a strong decade.

The odds on single companies

Funds that hold thousands of companies avoid a risk that is easy to overlook: most individual stocks are poor investments. A study of more than 64,000 stocks from 1991 to 2020 by the finance professor Hendrik Bessembinder found that 55.2% of US stocks and 57.4% of non-US stocks returned less over their lifetimes than one-month US treasury bills, and that the top 2.4% of companies accounted for all the net global wealth the stock market created in those 30 years. In other words, owning a basket that includes the winners matters more than choosing winners. A holding in a well-known company can still do well, but a portfolio built from a handful of them depends on picking correctly from a group in which most picks lose to cash.

Options that did better than expected

Researchers sort stocks by size and by price relative to book value. In our data, the smallest and cheapest companies ("small value") returned more than the whole market in every region we tested over the 30 years.

Three cautions apply. First, the gain was largest outside the US (3.6 points a year in Europe, 3.5 in developed markets outside the US) and small in the US (1.1 points). Second, the benefit was uneven. In the US, small value returned 5.6% a year from 2006 to 2015 against 7.5% for the whole market, and 11.0% a year from 2016 to 2025 against 14.7%. Investors who held it had two decades of no advantage, then a gain. Third, these are research portfolios with no trading costs or fees, and funds that follow similar ideas cost more to run than a plain market fund and may not match the result.

The other patterns above point to different options. A cash or money market sleeve reduced the worst fall in every test and kept real purchasing power roughly intact, at a cost in long-run growth. Emerging markets returned 18.5% a year over the 10 years ending March 2013 and as little as 1.4% a year over the 10 years ending March 2020, so they work as a diversifier only for investors who can hold through long weak periods.

Questions to ask about your own portfolio

• What are you comparing it with? A portfolio that did worse than the US over the last decade may have done better over a different decade. Pick the benchmark that matches your plan, not the best recent performer.
• How much overlaps? Funds that track a global index, a US index and a European index can hold many of the same companies. Adding another does not always add diversification.
• How much rests on a few companies or sectors? Most single stocks did not beat cash, and sector leaders changed each decade.
• How much cash or similar assets do you hold, and what is it for? It reduced the worst fall in every test above, and it did not keep pace with inflation in US dollars.
• In which currency do you spend? All our figures are in US dollars. A different home currency changes the results, sometimes by several points a year.
• What do fees and taxes cost, and when? Our numbers ignore both, and selling to rebalance can create a tax bill. Many investors rebalance with new contributions instead of by selling.

What this does and does not show

• Regional indices are proxies. The US series is the return of all US-listed stocks (CRSP), not the S&P 500, but the two moved together closely. Against the S&P 500's annual total returns from Damodaran's dataset, the US series had a 30-year return of 10.4% against 10.3% and annual returns that correlated at 0.99 (individual years differed by up to 6 points). The European, Japanese and emerging series are broad market indices by the same method and are not the same as any single fund or index such as the STOXX Europe 600.
• US dollars only. Exchange rate moves between your own currency and the dollar change results, and the dollar's value against others varied over 30 years.
• Before fees, taxes and trading costs. Funds cost something to run and small-company stocks are costly to trade. The small value series are research portfolios that cannot be bought directly.
• "Global" is our proxy. The 90/10 mix is a fixed approximation. Real global index funds changed their weights over time, and emerging markets were a smaller part of the market in the 1990s.
• Thirty years is a short sample. It contains few full market cycles and one decade, 2016 to 2025, that dominates the US result. Different start and end years give different answers, and we chose complete calendar years, 1996 to 2025.
• Sector results are US only and reflect how the data library groups companies into industries.
• Not advice. We do not know your goals, time horizon, tax position or risk tolerance, and nothing here recommends any security, fund or asset.

Method and data

Data retrieved October 2026. Calendar-month total returns from January 1996 to December 2025, in US dollars. Annual returns are the geometric average (compound) return. Worst fall is the largest decline from a previous monthly peak. Mixes are rebalanced monthly. The $500 a month figures assume a deposit at the start of each month. Charts and figures are our own derived work from these sources and are not endorsed by them.

• Kenneth R. French, Data Library (Tuck School of Business, Dartmouth). We used the market returns (market minus risk-free plus the one-month treasury bill rate) for the United States, Europe, Japan, developed and emerging markets (the international research factors), the 12 and 49 industry portfolios, and the size and book-to-market portfolios (value-weighted returns, "small value" is the highest book-to-market group within the small-cap half). The library credits CRSP for US data and Bloomberg for international data.
• Aswath Damodaran, Historical returns on stocks, bonds and bills (NYU Stern), used to check our US series against annual S&P 500 total returns.
• US consumer prices: US Bureau of Labor Statistics, CPI for All Urban Consumers (CPIAUCSL), via FRED, December 1995 to December 2025.
• Hendrik Bessembinder, Do stocks outperform treasury bills? and its follow-up studies, including "The global evidence" (1991 to 2020), on the page of Arizona State University's W. P. Carey School of Business. We quote the figures as stated there.