Comments on: What investment return should you plan for?

By: WellHeeledBlog

WellHeeledBlog — Mon, 08 Feb 2010 23:19:06 +0000

This is a great post… and I agree that a 10% return is probably unlikely for the average investor. There are things I can control – how much I save, what my asset allocation is, the fees I pay to managers, and there are things I can’t control – market returns, geopolitical implications, future tax rates, etc. Instead of focusing on what I can’t control and giving in too-rosy a mindset, I’m trying to save as much as I can so that I can improve my odds of a comfortable retirement.

But wouldn’t it be NICE indeed if we can get 10%, 15%, or even 20% annual return?

By: 20 Cents from January 2010 | Balance Junkie

20 Cents from January 2010 | Balance Junkie — Mon, 01 Feb 2010 10:50:52 +0000

[...] Economics had a great post asking What Investment Return Should You Plan For? I very much agree with the analysis here, as I think the conventional wisdom of 7% – 10% [...]

By: Carnival of Personal Finance #241 : Carnival of Personal Finance

Carnival of Personal Finance #241 : Carnival of Personal Finance — Mon, 25 Jan 2010 19:18:29 +0000

[...] His Editor’s Picks are: Dividend Growth Investor: Buffett the dividend investor A Gai Shan Life: I don’t want to retire Financial Highway: MythBusters: Financial Advisors Planting Dollars: Being Rich versus Being Wealthy Len Penzo dot Com: When Pigs Fly: How I Fought My Parking Ticket and Beat City Hall Pop Economics: What investment return should you plan for? [...]

By: Pop

Pop — Mon, 25 Jan 2010 15:26:08 +0000

Hey Ryan,

Thanks for commenting. I don’t know if I’d shoot for the “desired 10%” as much as control what you can control. If you’re able to save 20% or 30% of your income, you can live with a 5% or 6% return. If the 10% comes, great. If it doesn’t, at least you have a decent standard of living at retirement.

Believe it or not, I’ve seen that video before. The guy’s an incredibly dynamic speaker and has one of the best uses of charts and graphics in a presentation that I’ve ever seen. I do think that international and emerging markets are going to see higher growth than the U.S. in general. But I’d also keep in mind that a big percentage of U.S. company revenues come from abroad–more than a third for the S&P 500 as a whole, if I remember correctly. So even just investing in U.S. stocks, you’re getting international exposure. Anyway, I don’t know how that would change my allocation strategy. I’ll have to think it through a bit more and write a post on it .

Anyway, hope to see you around!

By: Ryan @ Planting Dollars

Ryan @ Planting Dollars — Mon, 25 Jan 2010 13:47:48 +0000

Very insightful post. Market timing for beginning and ending stages of an investors career are incredibly significant as you’ve noted. Also, the growth rate of America is limited by technology gains, which are highly variable (Does twitter makes us more productive? ). It’ll be interesting to also see population patterns over the next 100 years as growth cannot occur without more people. Europe and Japan are already seeing some declines…

I found an interesting video on the TED site that discussed when China and India will catch up to the US in terms of average economic standing and the result was 2068. Their growth rates were exponential until they caught up to the standard… I wonder if investing heavily in foreign sectors is the only way to produce the desired 10%? What are your thoughts?

Check out the video
http://www.cnn.com/2010/OPINION/01/12/rosling.converging.world/index.html