What is the average 10 year return on VTSAX

The average 10-year return on VTSAX has historically been around 10-12%. That number, however, is like an average yearly temperature—it hides the hot summers and cold winters of the stock market. This guide breaks down in simple English what VTSAX is, its historical performance, and what that famous “average” actually means for your money.

What Is VTSAX? A Simple Guide to Owning the Whole Market

Instead of trying to pick one winning company out of thousands, imagine you could buy a single share of a giant shopping cart. This cart, known as an index fund, is pre-filled with a tiny piece of nearly every publicly traded company in the entire U.S. stock market.

That’s exactly what VTSAX, the Vanguard Total Stock Market Index Fund, is. When you invest in it, you aren’t betting on a single business to succeed. Instead, you’re buying a sliver of over 3,000 U.S. companies, from giants like Apple and Amazon to smaller businesses you’ve never heard of.

This strategy is called diversification, and it’s the investing version of “not putting all your eggs in one basket.” Because your money is spread so widely, the failure of a few companies has a much smaller impact on your overall investment. This built-in stability is a key reason so many see VTSAX as a foundational investment.

Decoding the 10-Year Return: What the Ups and Downs Mean

Historically, VTSAX’s performance has often averaged around 10-12% per year over long periods. However, the market doesn’t move in a straight line; it’s more like a rollercoaster, and you don’t get that “average” return every year. A ten-year journey might include years that look very different:

• Year 3: +22% (A great year!)
• Year 4: -15% (A scary drop)
• Year 5: +18% (A strong recovery)

The number you care about is the overall upward trend over time, not the yearly bumps. This is what investors call volatility, and it’s a normal part of the process.

Another key piece of the puzzle is the expense ratio. Think of this as a tiny annual fee for managing the fund. VTSAX is famous for having one of the lowest fees around. While a fraction of a percent may seem small, keeping costs down means significantly more of your money stays invested and compounding for your future.

Finally, it’s crucial to remember that past performance doesn’t guarantee future results. While the history of the stock market shows a powerful tendency for long-term growth, this is a trend, not a promise. This isn’t a rule specific to VTSAX—it’s the fundamental nature of investing.

How to Start Investing in VTSAX

Now that you understand VTSAX is a long-term engine for goals like retirement, how do you get started?

A powerful strategy is dollar-cost averaging—investing a set amount regularly, which can turn market volatility into an advantage. To begin, you’ll need an IRA or a brokerage account, which are simply the containers that hold your investments. Researching these is the logical next step on your investment journey.