Friday, March 16, 2007

Return from different types of investments?

What is the return, over a long period, from different types of investments?

For global equities, the average return over the past 10 to 20 years, is about 8% to 10% per annum, in US dollars.

For global bonds, the average return is about 4% to 6% in US dollars.

The average return is about 6% to 8% per annum, in US dollars. Converted to Singapore dollars, the average return is about 4% to 6% per annum.

What is the expected return for the future? Nobody knows. For myself, I am happy to get an average return of 4% to 6% per annum, in a well diversified portolio of equities and bonds.

If I invest entirely in equities, I target to get 6% to 8% per annum on the average, but I will have to accept the volatility in the actual returns. It can be quite ihgh in some years and may be negative in other years. If I invest for many years, the average return should be quite attractive.

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