Is it possible to get a 10% return on investment?

If one type of investment drops your entire portfolio won't take a hit and you'll be able to take advantage of potential strong returns with other assets. This way if one asset is returning 15% but another drops to only a 2% return, it's still possible for your entire portfolio to reach a steady 10%+ return .

What is a good return on investment over 5 years?

General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.

Is 12% return possible?

Of course! The highest average 30-year geometric return was 13.7%, so it's definitely possible . At the same time, though, the lowest average 30-year geometric return has been 8.5%, so it's been lower as well.

What is the 10 year rule on investing?

The 10-year rule allows beneficiaries flexibility when tax planning for their inherited retirement account distributions . For example, the beneficiary of an account owner who died before the RBD could let the inherited account grow for 10 years and then take one large distribution in the tenth year.

Can I become a millionaire in 5 years by investing?

Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year .

How much do I need to invest to make $1000 a month?

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

How much money do I need to invest to make $3,000 a month?

Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.

Can I get 10% return?

Yes, a 10% annual return is realistic . There are several investment vehicles that have historically generated 10% annual returns: stocks, REITs, real estate, peer-to-peer lending, and more.

Is 15% return possible?

Stock exchange markets are considered inherently unstable and unpredictable, however, in the long run, they eventually tend to rise, and though a return as good as 15% each year might not always be achievable in the stock market, an annual return of around 15% may be possible over the foreseeable future , but remember, ...

Is 20% return possible?

Relatively safer investments may see less volatility in an average year, but if you have a long enough timeline, you have the potential to earn that 20% return eventually .

What is a 10x return on investment?

Obviously, the way to calculate a return multiple is to divide the amount returned from an investment by the dollars invested . If I invested $10M in a company and got back $100M, that's a 10X return.

What is the 10x rule in investing?

While it is true that angel investors (like our dragons) typically seek 10 times their money back over 3-5 years that isn't the source of the "10x rule". The 10x rule means that in order to gain market traction a product must be exponentially better . ie 10 x faster, 10x smaller, 10x cheaper, 10x more profitable.

Can I expect 10% return over five years of investing? (2024)

A reader wants to know if he can expect “10% per annum” if the investment period is a “minimum of five years”. Again, regular readers of freefincal might dismiss this as a newbie mistake, but it is a common mistake and deserves some attention.

The first point to appreciate is unless we are investing in fixed-income instruments with a guaranteed return, there is no “per annum” return. In a capital market-linked instrument like mutual funds, we have no idea what the (final) returns will be, and they are computed in hindsight. That is at the end of the investment period. Therefore the thumb rule is to expect as low as possible.

Many investors try to compensate for their inability to invest more by taking on more risk assuming that it would fetch them higher rewards. This is a mistake. A higher risk only implies a higher risk. That is, the range of possible returns is higher, and we could end up with any return from a significant positive to a large negative value.

So how do we handle this uncertainty?

Time. The longer the investment period, the better the chance of us managing the portfolio as per our needs and reducing this uncertainty. Some claim that the longer the investment period, the better the chances of getting a “good return”. This is incorrect. The uncertainty associated with the stock marketnever dies down! See: The stock market always moves up in the long term, but returns move up and down! If we do not manage risk systematically, we will leave the fate of our investments to luck.
Asset allocation: The right mix of volatility (equity) and stability (fixed income) is essential. It is the simplest way to reduce return uncertainty. Yet most investors get this wrong. They either use too much equity for too short a time or too less equity for longer periods.

The asset allocation is primarily determined by the investment period. So to pull this off, we must be clear about when we need the money. Many investors first say they want to invest for five years, but when pressed about when they need the money, they say they can afford to invest for longer.

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This is why it is crucial to separate short-term goals from longer-term goals. If someone says they can invest for a minimum of five years, we can only offer recommendations for the five years.

A duration of five years is still a fairly short time. The return uncertainty is hard to minimise over this period. Therefore, we recommend avoiding all equity if the goal is crucial (needs). For flexible goals (wants), you can consider a conservative hybrid fund like Parag Parikh Conservative Hybrid Fund.

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Dr. M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter, Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.

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Can I expect 10% return over five years of investing? (2024)

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