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BrianW
12-04-2009, 03:50 AM
What would represent a good "total rate of return" for the calendar year, percentage wise?

5-10%

10-15%

15-20%

20-25%

25-30%

more...?

seanz
12-04-2009, 04:14 AM
If it went up by any % in this calender year you're doing fine.
;):)

BrianW
12-04-2009, 04:26 AM
Well, I didn't include any negative values. ;)

shamus
12-04-2009, 04:38 AM
Mine's not a 401k, but what we call an SMSF, and for the 12 months to June 30 it returned 6.3%, which was appalling compared with prior years, but it never went negative on a monthly basis.

GregW
12-04-2009, 07:04 AM
YTD S&P500 is +18.14%, use that as a benchmark.

paladin
12-04-2009, 08:57 AM
Mine was locked in 1985 at 14.5%......at the time the rates were floating between 18-21% and the house called a meeting and offered a fixed 14.5 to anyone that would take it fearing that they could go bust...2 of us accepted it....the rest wanted the higher returns.....within 30 days it dropped to 4%....mine stayed the same....I was dumping 40% of my salary into it...as it was before taxes, and I really didn't need the money to live on.

Kaa
12-04-2009, 10:41 AM
What would represent a good "total rate of return" for the calendar year, percentage wise?

Are you talking about this calendar year, 2009? Or in general?

If by "good" you mean "compared to most other people" (it's really hard to discuss "is X good?" if you haven't defined what "good" is), the critical thing becomes the amount of risk that you took or are willing to take.

The standard for the US equity market is generally the S&P 500 index.

Most people also hold some bonds. You can probably take the total yield on, say, 10-year AA corporates as a reasonable average if you don't want to delve into bond indices.

I am sure googling will turn up some ideas about the "average" asset mix held by Americans and you can compare your returns to that.

Kaa

peb
12-04-2009, 11:36 AM
You can compare them to the markets as a whole and keep it rather simple.

The S&P has a total return of around 25% YTD. Any stocks can be compared to this.

Bonds can be harder to find relative numbers to compare them to. For no particular reason, I sometimes just use the Vanguard funds as a baseline:

https://personal.vanguard.com/us/funds/vanguard/index

YTD high yeild corporates have a total return of around 35%.

Total bond index shows around 7.16%.

John of Phoenix
12-04-2009, 12:20 PM
If you beat inflation by 3% on a consistent basis you'll be fine.

Chuck, what a call!

Kaa
12-04-2009, 01:09 PM
So, don't gauge the return by comparing market indices... guage it by the return relative to risk, your personal risk tolerance, and inflation.

That might be good advice, but only if you can provide a coherent definition of risk, ways to measure it and find out what the risk of your portfolio is, not to mention somehow figuring out your personal risk tolerance. All that is quite non-trivial.


Nobody is going to award points to you for doing well in investments...

You don't get awarded points. You get awarded dollars :D

Kaa

Dave Wright
12-04-2009, 01:32 PM
If you beat inflation by 3% on a consistent basis you'll be fine.


Right on!

I think this article, while 8 years old now, gives a very simple, realistic, and conservative view for considering your probability of particular returns over time for three typical stock allocations:

http://analyzenow.com/Articles/Planning%20Post%20Retirement/Planning%20Post%20Retirement%20Articles/Retirees%20Need%20Conservative%20Planning.pdf

You may be surprised at how low the retunrs are. Realizing this is the first step to successful planning.

Soundbounder
12-04-2009, 01:37 PM
YTD S&P500 is +18.14%, use that as a benchmark.That is only a good benchmark if you also look at the declines from the previous years.

For example, in the dot.com bubble, I didn't make anywhere near the gains that the S&P realized. Other than stocks like IBM and Intel, I didn't own any of the tech stocks that caused the S&P to soar.
On the flip side, when the bubble crashed, I didn't experience the heavy losses.

This past year, the bank and financial stocks were the ones most beaten down in January. They are also the ones that have now bounced back the most percentage wise. Since January, many of them are up significantly. But if you have owned them for a few years, you are still way down.

Looking at one year doesn't tell you much.

George Roberts
12-04-2009, 02:49 PM
What would represent a good "total rate of return" for the calendar year, percentage wise?

Before or after taxes? In a taxable account or tax free account? Cap gains?

NASDAQ numbers:

1579 Jan 1
1282 Low
2181 Current

Up 38% from Jan1. Up 70% from the low. Most people would be happy with the 38%.

---

There are a lot of people who "know" about "risk." Very few people know how to accurately evaluate risk.

---

A large portion of my public investments are up 70% from Jan1. 100% from their lows. I am happy with the 70%.

The rest of my public investments are up 25-35% from Jan1. (Do not have the figures from the lows.) Not the best, but I am happy.

My wife's business is doing very well. Not as well as last year, but last year was really good. (I don't talk about the rest of our holdings.)

Kaa
12-04-2009, 03:01 PM
Before or after taxes? In a taxable account or tax free account? Cap gains?

There are words "401(k)" in the name of the thread... :-)



There are a lot of people who "know" about "risk." Very few people know how to accurately evaluate risk.

I bet even fewer than you think. Risk, regardless of common perception, is a forecast and forecasting is notoriously difficult, especially the future :D

Kaa

Soundbounder
12-04-2009, 03:21 PM
A large portion of my public investments are up 70% from Jan1. 100% from their lows.

Without disclosing your losses from 2008, your percentages mean nothing.
If I bought a stock at $20;
It fell to a low of $7;
In January it was around $8
It is now $14;
I would be up 70% this year also.
I am up 100% from the lows too.
But I am still down significantly.

George Roberts
12-04-2009, 04:26 PM
Without disclosing your losses from 2008, your percentages mean nothing.
If I bought a stock at $20;
It fell to a low of $7;
In January it was around $8
It is now $14;
I would be up 70% this year also.
I am up 100% from the lows too.
But I am still down significantly.

You are absolutely right. (Relatively right also.) But that is not the question that was asked.

Had it been the question I would have suggested that one should look at something like one's assets and liabilities and determine if they have moved up the economic ladder or down it.

Most years including the last several I have improved my economic condition relative to the national averages. That is good enough for me. (I am even happy if I don't fall too much relative to others.)

George Roberts
12-04-2009, 04:40 PM
There are words "401(k)" in the name of the thread... :-)
Kaa

I saw the words but ...

Most people have assets other than a 401(k). And a dollar of growth in some assets is worth more than a dollar of growth in other assets.

In particular, if one needs a dollar, to get that dollar from a 401(k) might require some type of tax payment and a penalty. It might be proper to compute the value of assets based on what conversion to cash would produce.

One might even want to convert the 401(k) to an IRA and then to a Roth IRA. That gives one a different rate of return.

BrianW
12-04-2009, 04:51 PM
Thanks folks.

Smoked the S&P average by a long shot, with fairly low risk choices. So I'm happy.

George Roberts
12-04-2009, 04:58 PM
So I'm happy.

Cannot hope for more than that.

jimkeen
12-04-2009, 08:44 PM
For 2009 you should see somewhere around 18%. If not talk to your financial adviser and make adjustments. All in all a good year for catching up.
All of the investing advice is good but if you are like me stay the course seems to work.