Why start in January 2000?
January 2000 sits close to the peak of the technology bubble, which makes it a demanding test for any stock investor. Someone who invested a lump sum then lived through two deep drawdowns in the first decade, and many people forget that the S&P 500 in U.S. dollars spent years below its early-2000 level. Starting here gives an honest, unflattering baseline instead of a cherry-picked window that begins near a market low.
The long horizon also lets compounding show up. A twenty-plus year window contains full boom-and-bust cycles, so the annualised figure is less dependent on where you start or stop than any five-year snapshot.
The currency effect for Canadians
The S&P 500 is priced in U.S. dollars. A Canadian buying it is also taking a position on the USD/CAD exchange rate. When the U.S. dollar strengthened against the loonie, Canadian investors received a bonus on top of the index return; when the loonie rallied, such as in the 2000s commodity boom, that bonus turned into a drag.
This calculator converts the monthly index level using that month's USD/CAD rate, so the currency effect is baked into the growth line. If you want to see how large it was, compare the result with a U.S. investor's return in the S&P 500 over the same dates.
Total return versus price return
Dividends have been a major component of equity returns, and the default setting reinvests them, which is how most long-term investors in a fund or DRIP experience the market. If you switch the calculator to price only, the dividend contribution disappears and you can measure how much of the outcome came from payouts rather than appreciation.
Remember that U.S. dividends are subject to withholding tax in some account types. The TFSA option on this page estimates that drag so you can compare accounts.
Making sense of the monthly contribution
The prefilled scenario adds five hundred dollars every month in addition to an initial ten thousand. Regular contributions mean you buy more units when prices are low and fewer when they are high, which smooths the entry price. They also make your own deposits a larger share of the final balance, so the annualised money-weighted return will not match the index's plain annual return.
Try changing the amounts and the date range. Shorter windows that end during or just after a crash will look very different from the same strategy ended a few years later, which is the point: sequence of returns matters.
How to read a twenty-year chart
When you look at the growth line above, notice three things. First, the nominal line and the inflation-adjusted line separate gradually, and that widening gap is the cumulative price increase you would have had to overcome. Second, the dashed line of cash deposited shows how long it took before the portfolio sat comfortably above your own contributions after each crash. Third, the steepest part of the curve often arrives late, because compounding works on a larger balance.
Use the quick presets to jump straight to the dot-com bubble or the 2008 financial crisis and see how far the balance fell in each. Seeing a drawdown in your own dollar terms is a useful way to ask whether you could stay invested through a similar episode.
Limitations to keep in mind
The calculation uses monthly data, ignores fees and personal tax, and assumes you can buy fractional units at the month's level. Hedged and unhedged Canadian-listed ETFs can behave differently from the unhedged conversion used here. Historical returns are not a forecast, and this page is for education only.