Most people invest at some interval (through their 401k, IRA, or whatever) and it is much better to run some kind of test that mimics this to some degree.
If you bought the SPY once a year, once a month, once a XXX from 1998 to 2018, what are your returns looking like?
https://paulmerriman.com/lifetime-investment-calculator/
If you'd invested 100% in the S&P 500, say 10,000 a year on Jan 1 every year from 1998 to 2018, you'd have $522,135 from a $200,000 total principal, or roughly 13% annualized return (not including inflation)
The "rate of return" isn't quite as simple to define when you're talking about multiple contributions over time. The most straightforward approach is to look at it as a weighted average, and the exact value depends on how you do the weighting. But in this case, it's in the ballpark of 7%/year nominal, which is probably 4-5%/year after inflation.
As you can see, you get a big boost (at least in this cherry-picked example) by continuing to invest through the downturn.
This can be eye-balled on this chart: https://themeasureofaplan.com/wp-content/uploads/2023/01/Rol...
The bottom graph shows the annualized return for each 20-year period in market history. 20-year holding periods have this behaviour: - Max: 13.2% - Min: 0.5% - Average: 6.6% - Std. Dev.: 3%
So, if you dollar cost average over time and hold each of those investment cohorts for ~20 years, you should expect an average annual return of roughly 6% (+/- 3%).