While financial markets can be frustrating in the short-term, the long-term growth potential is excellent. For that reason, we ignore short-term noise and focus on the long-term.
In August of 1979, Business Week Magazine had a cover titled “The Death of Equities”. Some investors were caught up in the noise and avoided stocks. Nevertheless, $10,000 invested in the S&P 500 index at that time has grown to over $200,000 by August 2009, an average compound rate of return of more than 10 percent per year over 30 years. Yes, there were some market pull-backs over that thirty year period. Pull-backs (or corrections) are simply great buying opportunities. We are successful by remaining calm and staying the course.
Of course, the S&P 500 is only an index, one of the many benchmarks the industry uses to compare long-term results. There are many indexes available for domestic equities, global equities, emerging markets, etc. The managers that we recommend to clients have a long-term objective of creating higher returns over their benchmark indexes in the long-term, while minimizing risk in the short-term.
Finally, returns are enhanced when taxes are reduced. We employ a number of strategies and tools to minimize the negative effects of taxes on your portfolio; including, registered plans, Tax Free Savings Accounts, capital class structures, T-SWP’s, and more.
Watch the video below for a discussion about investment returns and expectations.
What returns are reasonable to expect?