Investment expectations

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And yet a saver/investor needs to be able to compare the two in making investment decisions.

dh's approach would give a different growth figure to his client depending on whether he was talking about 3,5,7 or 10 years growth - even if the fund performed exactly the same over each period of time.

dunstonh

So an investment house could produce returns of 10% pa for ten years and tell the public that returns over ten years have "averaged" 16%?

Neither very logical, nor very likely :rolleyes:. That would be deception, pure and simple.

It is quite logical. If you have accumulation units, what is there to compound?

You like at point A to point B then average it. Lipper, Morningstar, Financial Express, S&P all do it that way.

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Maybe this is why we have disagreed in the past on potential investment returns?

When dh says 20% returns are very achievable he might "merely" mean doubling his clients' money every five years?

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Best to let dh explain what he means when he talks about 20% returns to his clients, pru.

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prudryden wrote:

I got it!! whew!! "If you got 100% in 5 years, you would be overjoyed." Well, I guess I certainly would be.

With respect, that's utterly irrelevant unless you are wanting to establish credentials as a dh "cheerleader".

Although I would also be overjoyed to double my money in the next five years . It's every investor's goal .

I look forward to dh's reply in person.

Market_Oracle

Probably at some point, the FSA will pass a ruling that ALL investment returns are presented as AER's , i.e. Annual EQUIVALENT rate, for fair comparison between products / options.

Its no good saying 10% a year, when over 10 years thats about 7% AER, which is barely more than the 6% Fixed Rate bonds on the market today without the associated risks.

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We're not on dh's back.

We're just waiting for his response to the simple question:

"What does it mean when he says to a client [or posts on MSE - as he has done on previous threads] that 20% returns are possible"

With respect, it's time for the organ grinder, rather than the monkey, to respond.

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More irrelevance . Please stop putting up a smokescreen, pru.

What does dh - or any IFA - mean when they talk about 6%/8%/10%/12%/15%/ 20% returns to clients?

Do they mean total growth over x years divided by x as dh has suggested on this thread as the industry norm ?

It's a pretty simple question that dh is best placed to reply to.

We await his reply with interest.

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More smokescreen & now a few casual insults as well. Ho hum.

Where is dh?

Running scared? I can't believe it.

prudryden wrote:

dh probablywon't waste his time responding to you.

Do you know something that the rest of us don't?

That's not the dh we know and love .

donjuandisco

Hey everyone

Thanks for your replies. I realise there may be some more discussion to come regarding the correct way to report/show these figures, but it all helps.

Reason for OP was to help me decide whether I should start some investments or just carry on saving, my problem is the more info I collect the more I don't understand. I think part of this has come about by me having two seperate IFA's round. They both gave me different explanations of same products and in one case I had to put him straight regarding a tax issue, so neither of them filled me with confidence and that is what's led to me trying to find out some info for myself.

DH, from your response does it translate into 'After 5 years my £30k is now £45.87K' ?
Also, forgetting tax for a minute, if I put it in a savings account and get 5%pa will that be £38.29K after 5 years?

If these numbers are right then it seems the reward for accepting a level 5 risk over 5 years would be just over £7,500

Am I being too simplistic with this or am I way off track ?