What is a realistic return when investing in stocks?

Question

Could an average investor get a 6% annual return? What about 8%? Or 10%?

Answer 1

10% is what we hope for. Depends on the type of stock and how long you hold the shares.  In for the long haul yes you will see plenty with a 10% return

Answer 2

If you are good you could get at least 10 or 20%.

But recently companies are not doing so well, so if you get 10% now you are considered really good.

Answer 3

An average investor would get 7.5 % an above average investor could get well over 300 % if they were really lucky and got the right stocks at the right time.like google in 2004.

Answer 4

Over the last 40 years, the average return has been 11%. When you consider taxes on the dividends you are making and any capital gains taxes from sales, you may actually return closer to 7-8%.

The modern wisdom with investing is that you should be well diversified and you should keep your expenses as low as possible. Research shows that financial advisers are not able to beat the market. You want to be in a well diversified mutual fund that is no-load (no up-front costs) and has a very low expense ratio.

If you want more control over your investments in the market, consider exchange-traded funds which will let you easily buy certain sectors int he market or invest in specific foreign markets.

Either way, unless you're going to do this full time, don't try anything too fancy. Keep it simple and keep your expenses very low.

Good luck!  

Answer 5

http://pages.stern.nyu.edu/~adamodar/New...

Answer 6

9% annual average over time.  Performance in any one year could be much higher or lower.  The average investor can get this, or slightly better, by using a financial advisor or by doing their homework and only choosing good stocks or mutual funds.  I recommend mutual funds, as they permit ease of diversity.

Answer 7

9% is roughly the historical average of the S&P 500 (excluding dividends).  11% is roughly the average once you include dividends.

So 6% is relatively easy.  However, you won't see that every year.  You have to be prepared for volatility - down 10% one year up 20% the next.  Your time-horizon should be 5+ years IMO.

Like a poster above said it's possible to beat those returns though that takes education and time studying up on companies.  If you don't want to do that, like he said some broad-based mutual funds are definitely your best bet.

BTW, I think it's a particularly good time to invest in stocks.  The recent market pessimism has a lot of good companies selling at far less than they are intrinsically worth.  I'm not sure what we'll see in the next year or so, but in 5-10 years an investment today in a good company should be doing well.