Here's How Much a $25,000 Investment in the S&P 500 at the Start of 2025 Could Grow to Be Worth in 25 Years

For decades, investing in the stock market has been an excellent way for investors to accumulate wealth. And the S&P 500 (^GSPC 0.82%) specifically has given investors an efficient way to tap into the best stocks in the world. In addition to sheer diversification, the index gives you exposure to solid growth stocks and income-paying dividend investments.

But just how much could you realistically expect to make from investing in the index if next year you put $25,000 into an exchange-traded fund (ETF) such as the SPDR S&P 500 ETF Trust (SPY 0.77%), which tracks the index? I’ll estimate what your portfolio might be worth after a period of 25 years from a simple buy-and-hold strategy.

Investors who invest today should expect lower returns

If you invested in a stock before it became red-hot and its valuation took off, it’s great news. You will end up generating some terrific profits. However, if you are looking to start investing in it after it became the stock market’s darling, then you might need to brace for lower returns than normal, given its already inflated valuation at your entry point.

That’s the situation that investors find themselves in when investing in an ETF that tracks the S&P 500. With the S&P 500 hitting record levels this year, it could be due for periods of lower returns in the near term. Top investment bank Goldman Sachs projects that over the next decade, the S&P 500 may average an annual return of just 3% — well below its long-run average of around 10%.

If you’re investing for a period of 25 years, you’re still likely to grow your portfolio, but with potentially many years of lower-than-typical returns, it may not be possible to average 10% gains. Instead, investors may want to be a bit more conservative and expect a lower average return.

SPY data by YCharts.

What could a $25,000 investment be worth in 25 years?

There’s no crystal ball that will tell investors what annual return the S&P 500 will actually average over the next 25 years. But the table shows you what a $25,000 investment would grow to be at 10-, 15-, 20-, and 25-year intervals, based on varying interest rates. Even with just a change of a few percentage points, it can mean a difference of more than $50,000 over such a long time frame.

Calculations by author.

The good news is that regardless of the actual return, you can still be in an excellent position to grow your investment to more than four times its original value. And if the S&P 500 performs more in line with its average of around 10%, your investment could grow to more than 10 times its initial value.

Investing in the S&P 500 still makes sense, even if you expect lower returns than usual

You might be tempted to wait for a crash and a more opportune time to invest in the S&P 500 than when it’s trading around its highs. But trying to time the market is something even the best investors don’t try to do because of how difficult it can be to try and predict how it will perform, even in the short term. And that can result in you missing out on profits by waiting.

Investing in the S&P 500 is still a good way to remain invested in the stock market, given the diversification it offers; there’s no need in such a situation to have to worry about picking individual stocks and regularly evaluating them to assess whether they remain good investments or if you should make changes to your portfolio. An ETF can drastically simplify your investing strategy, and by tracking the S&P 500, you can keep your risk relatively low while ensuring that your investment is likely to grow over the long term.