What's a convincing return on one's investments?
This website http://moneycentral.msn.com/retire/plann... assumes an average return on investments of 9%. Now, I'm not sure about my 401K, but I know my savings accounts, CDs and other IRAs aren't making anywhere practical 9% annually. More like 4% down to 3%. How does one come up with 9%?
Answers: You are chitchat about known adjectives investments. It doesn't work that way although you will see on Yahoo's stocks listing as expected adjectives value.
I would look at what you have first. If you are into conservative money market and bonds, you are right those won't even beat inflation, but they won't drop in price any.
If you are into mutual funds, 80% haven't historically beat the SP 500 over the long term. The SP 500 is the most important benchmark in mutual fund performance. The SP 500's historical increase over it's lifespan (decades) have been 12% a year on average (not including dividends) with long period of it being flat. A major investor, Warren Buffet, predicts it will greatly slow down to 6% a year on average for the subsequent 50 years. I don't know if that includes dividends which historically has been nearly 3%. 6+3=9.
Retirement accounts are usually based mostly in stocks, until you bring back near the age of retirement. The stock market historically returns at something similar to 11% to 12% per year, averaged over the last 70 years or so.
They assume most people hold a mix consisting of maybe 70% to 80% stocks, and the rest bonds, CDs, and other low risk investments.
But average means over the long residence. If you aren't putting this money away for at least 15 - 20 years, ignore what moneycentral is describing you.
To what extent is the inter lattice going to develop ?
What are the 5 most key factor that bring in you choose a stock?
How do i eyeshade for stocks that gather round a secure systematic criteria?
Dodge and Cox Global Fund?
What are two great stocks to invest contained by long permanent status?
What is a Put chance and a Call odds, and how do they work?
How is it similar to to be a definite estate agent or stock broker?
How & Why can a Company be tabled within USA stockmarket & UK etc?
Answers: You are chitchat about known adjectives investments. It doesn't work that way although you will see on Yahoo's stocks listing as expected adjectives value.
I would look at what you have first. If you are into conservative money market and bonds, you are right those won't even beat inflation, but they won't drop in price any.
If you are into mutual funds, 80% haven't historically beat the SP 500 over the long term. The SP 500 is the most important benchmark in mutual fund performance. The SP 500's historical increase over it's lifespan (decades) have been 12% a year on average (not including dividends) with long period of it being flat. A major investor, Warren Buffet, predicts it will greatly slow down to 6% a year on average for the subsequent 50 years. I don't know if that includes dividends which historically has been nearly 3%. 6+3=9.
Retirement accounts are usually based mostly in stocks, until you bring back near the age of retirement. The stock market historically returns at something similar to 11% to 12% per year, averaged over the last 70 years or so.
They assume most people hold a mix consisting of maybe 70% to 80% stocks, and the rest bonds, CDs, and other low risk investments.
But average means over the long residence. If you aren't putting this money away for at least 15 - 20 years, ignore what moneycentral is describing you.