We started leveraged investing last spring, when the markets went down.
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The average rate of return over the past 120 years for stocks has been over 10%. This is before taxes & fees.
Provided that all of your investments are tax-sheltered (RRSPs, TFSAs) and you can keep your costs to under 1%, then it is conceivable that your EFT selection can yield upwards of 9% per year, before inflation. Inflation has been just over 3% per year over the past 120 years, thus the real return has been about 6% per year. Not bad. Will it continue? I doubt it. Interest rates have been extremely low over the last 8 years, and they will remain low over at least the next 5 years. When I say "low," I mean lower than historical rate. These low rates will directly result in less rate of return for stocks. My expectations for equities are that they will bring about 4% of real return, with bonds providing a real rate of return of 1%. Be aware - you shouldn't base future rate of return based on past return! I hope I am wrong. Our Journey to Financial Independence.
I will be discussing multiple topics such as investing in current uncertain environment, RRSPs or TFSA, index investments, and will be referencing several of my favourite websites/blogs. |
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