Fri 27 Jan 2006
The numbers for long term investing
Based on the last 80 years - here’s what to expect on average per year:
Also called “nominal” returns, reflecting the actual percentage gains.
- Large-company stocks, such as those in the Standard & Poor’s 500 index, 10.4 percent.
- Small-company stocks, such as the smallest 20 percent traded on the New York Stock Exchange, 12.6 percent.
- Long-term government bonds, 5.5 percent. That includes interest payments, or yield, and bond price changes as interest rates fluctuate.
- Cash, represented by the 30-day Treasury bill, 3.7 percent.
- Inflation, 3 percent.