Averages

Student_of_£

Hi!
Ive been thinking about my savings and the future and I was wondering if anyone can give me an idea of "average" returns on investments and pensions, as I think when I start working I'll be paying into a pension as well as a S+S ISA.
Thanks

Reaper

If you are planning for retirement there is a great calculator on the HL site here:
http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

You can play around with the assumptions (eg inflation) including growth at 5%, 7% or 9%. I suggest either 5% or 7% depending whether you are feeling optimistic or not.

King_Weasel

Growth rates are misleading if youm ignore inflation. You need to think in terms of real growth ie growth over and above inflation.

grey_gym_sock

for average real (i.e. after deducting inflation) total returrn (i.e. income + capital growth) from investments, perhaps 4% ... though it can make a big difference whether you happen to have a good or bad period for investments - even when investing over a good few decades.

gozomark

in nominal terms, long term you can expect nominal GDP growth, less management fees.

kidmugsy

Student_of_£ wrote: »

Hi!
an idea of "average" returns on investments and pensions

According to a recent Credit Suisse report, over the next 20 or 30 years you might expect global markets to deliver (in "real" terms i.e. after inflation):

cash -0.8%, bonds 0%, equities +3%.

So if you go for a 60% equity, 40% bonds mix, you should expect about 1.8%. Subtract the management costs of funds (if that's how you like to invest), trading and reinvestment, that leaves you with approximately .... er, zero.

grey_gym_sock

kidmugsy wrote: »

According to a recent Credit Suisse report, over the next 20 or 30 years you might expect global markets to deliver (in "real" terms i.e. after inflation):

cash -0.8%, bonds 0%, equities +3%.

So if you go for a 60% equity, 40% bonds mix, you should expect about 1.8%. Subtract the management costs of funds (if that's how you like to invest), trading and reinvestment, that leaves you with approximately .... er, zero.

i should think that's within the range of plausible outcomes. whether it will actually happen, i have no idea. and nor do credit suisse. or they would be working out the best ways to bet on that outcome, instead of issuing reports to make themselves look clever.

cepheus

kidmugsy wrote: »

According to a recent Credit Suisse report, over the next 20 or 30 years you might expect global markets to deliver (in "real" terms i.e. after inflation):

cash -0.8%, bonds 0%, equities +3%.

So if you go for a 60% equity, 40% bonds mix, you should expect about 1.8%. Subtract the management costs of funds (if that's how you like to invest), trading and reinvestment, that leaves you with approximately .... er, zero.

Edit I think it is this link?

a Barclays study suggested equities would return something like 6%, as well see E(TR) bottom of page 4 in this link.

I've seen other studies though suggesting dismal historical returns such as this. There may be a 'survivability bias' in the stocks as well as the markets

Real returns are 4.3% for US market and roughly 2.5% for UK market between 1921-1996 with a median of 1.5% after allowing for inflation. See page 31.

Global stock markets in the twentieth Century, Philippe Jorion and William N. Goetzmann

fizio

I'm working on 4% over next 10 years across my global portfolio of stocks/shares/bonds/property.. I see that as 'best case' in the current environment