Investment Advice Please

Linton

Your 8% aim is very risky over a period as short as 10 years. To show you what “risk” could mean I asked Google Gemini about the best and worst years in recent times to have made a 10 year investment in a global index. The worst start date  turned out to be 1999 when you would have lost a small amount of money over 10 years and the best 2012 when you would have averaged 13% per year.

Whether the AI is correct I am not sure but the numbers seem about right to me

How prepared are you for the possibility of losing money?

dunstonh

Linton said:

Your 8% aim is very risky over a period as short as 10 years. To show you what “risk” could mean I asked Google Gemini about the best and worst years in recent times to have made a 10 year investment in a global index. The worst start date  turned out to be 1999 when you would have lost a small amount of money over 10 years and the best 2012 when you would have averaged 13% per year.

Whether the AI is correct I am not sure but the numbers seem about right to me

How prepared are you for the possibility of losing money?

I can take you back further to 1915 on 12 monthly slices...

10 year periods, 100% equities, market cap - worst period.
Nominal basis: -1% annualised or -9% cumulative - March 1999 to Feb 2009.
Real basis: -4% annuallised or  -35% cumulative - August 1969 to July 1979

Bostonerimus1

dunstonh said:

Linton said:

Your 8% aim is very risky over a period as short as 10 years. To show you what “risk” could mean I asked Google Gemini about the best and worst years in recent times to have made a 10 year investment in a global index. The worst start date  turned out to be 1999 when you would have lost a small amount of money over 10 years and the best 2012 when you would have averaged 13% per year.

Whether the AI is correct I am not sure but the numbers seem about right to me

How prepared are you for the possibility of losing money?

I can take you back further to 1915 on 12 monthly slices...

10 year periods, 100% equities, market cap - worst period.
Nominal basis: -1% annualised or -9% cumulative - March 1999 to Feb 2009.
Real basis: -4% annuallised or  -35% cumulative - August 1969 to July 1979

It's vital to understand the variations in historical annual returns when designing a portfolio, that's really all we have to go on because we can't know the future. There have been periods of poor returns and I've experience several of those in the last 40 years, but with very little sophistication my results have still been good. From 1987 to 2014 I followed a US biased 60/40 allocation and after 2014 I included more global equity in a 50/30/20 (US equity/Global ex US equity/US bonds) portfolio. My average annual return over the last 40 years has been 9.5%. I put this down to following a few simple rules and also being lucky to live through a period of enormous stock and bond market growth. So with a growth oriented portfolio, and keeping costs low, I don't see OP's 8% annual return as a ridiculous goal. Of course they also need to have a plan for failure to meet that goal.