Читать книгу Mutual Funds For Dummies - Eric Tyson - Страница 28

An investment’s return measures how much the investment has grown (or shrunk, as the case may be). Return figures are usually quoted as a rate or percentage that measures how much the investment’s value has changed over a specified period of time. So if an investment has a five-year annualized return of 8 percent, then every year for the past five years that investment, on average, has gotten 8 percent bigger than it was the year before.

So what kind of returns can you expect from different kinds of investments? I say can because we’re looking at history, and history is a record of the past. Using history to predict the future, especially the near future, is dangerous. History won’t exactly repeat itself, not even in the same fashion and not necessarily when you expect it to.

Over the past century, ownership investments like stocks and real estate returned around 8 to 9 percent per year, handily beating lending investments such as bonds (around 5 percent) and savings accounts (roughly 4 percent) in the investment performance race. Inflation averaged around 3 percent per year, so savings account and bond returns barely kept up with increases in the cost of living. Factoring in the taxes that you must pay on your investment earnings, the returns on lending investments actually didn’t keep up with these increases. (For comparisons of various funds’ returns, see Chapter 17.)