What percentage of investors achieve these returns?

[stressor]

Just doing some basic research on expected returns. This article https://www.thebalance.com/good-rate-roi-357326 sugggests shares typically generate about 7% per year, property 10%. Looking at FTSE100 as a whole, returns ave around 3.9% over last 5 years, 8.8% over 10 years , 3.2% a year over 20 years and 6.4% over 25 years but *only with dividends reinvested*. Without dividends its 0% over last 5 years according to https://www.ig.com/uk/trading-strategie ... 00--190318. US equivalent is here https://www.getrichslowly.org/stock-market-returns/. There is also inflation and tax to consider.

So coming to my question, what percentage of stockmarket investors would make the following (after tax, including dividends if applicable) consisently (?ave over 5 years). Before some giant claims roll in remember Berkshire Hathaway averages 20.5% (albeit for more than 50years!)

-10% or lower
-10% to 0%
0 to 5% (slightly below market ave)
5 to 10% (slightly above)
10 to 20% (significantly above)
20% or higher (way above)

Most people expect 10% but realistically? https://www.thisismoney.co.uk/money/inv ... -year.html

[johnhemming]

This is a really difficult question to answer. Firstly you are asking the question "after tax" as with many people who are members of this forum I have stocks in a SIPP and stocks in a number of ISAs. Hence the same stock gives different returns (after tax). Capital taxes are also different to income taxes and different forum members pay different tax rates.

Hence I think you can only really get a usable comparison on a pre-tax basis. That would be including dividends where dividends are paid, however.

Secondly there is a question of risk. I plan my investments with a portfolio of risk. I have some property and other investments ranging from loans through preference shares and bonds (although I have sold most of those now) through to equities. I have equities in the UK, abroad, on the main market, AIM and in fact also NEX (which used to be Ofex or Plus).

All of these have a diffent risk pattern as well as the inherent risk pattern of the stock. For example I hold Lloyds, that has an exposure to the UK domestic market. If the UK economy suffers so does Lloyds. However, I consider Lloyds to be perhaps more predictable than other stocks - although I think if we can avoid a disastrous Brexit Lloyds would easily be 80p+ in 2021. I am currently punting Tullow and Ferrexpo. If those go well I could double my investment over a period of say 18 months (I am currently in the money on my average price). However, they are much more unpredictable than Lloyds - for different reasons.

I have a sort of rule of thumb assumption that for a stable business you can get 4-5% dividends whilst maintaining the capital value in real terms. However, I have over the years from time to time done really quite well out of particular stockmarket investments - as did quite a few people who participated in TMF banking board, for example.

On the other hand I have not actually tried to calculate my rate of return either pre or post tax.

[PinkDalek]

[On the other hand I have not actually tried to calculate my rate of return either pre or post tax.

Me neither but the OP appears to be asking if we have any statistics on the world at large, rather than us individually.

[johnhemming]

My impression was that the OP was asking people what they though rather than for a source of independent evidence (which is even harder to get something reliable on).

[Sobraon]

I hope I have understood the OPs post, but hopefully this addresses one of the main points. If you like the historical numeric side then may I suggest the OP spends time listening and reading some of Paul Merriman's work, his podcast is called 'Sound Investing' ( Google will locate his podcast, apologies if you have already come across his work). IMO, although US focused the podcast is interesting, informative and entertaining.

Paul spends a lot of time with the historical US numbers ( although some international) looking at performance since the 1920s. In trying to answer the question whether is it realistic to expect a 12% long-term return, he points out that "[i]n all of the 50-calendar-year periods going back to 1928, the S&P 500* had a compound return, on average, of 11%" (i.e sliding 'windows' of 50 years). But the worst half-century was 7.7%. Here is a link to the paper.

In the same paper he also looks at Large-cap value, Small-cap blend, Small-cap value and US Treasury Bills

*(S&P didn't exist before 03/1957 so earlier data is synthesized).

[AsleepInYorkshire]

There are so many vagaries

• Timelines
• Sphere(s) of Investment
• Appetite for Risk

The average salary of the UK is £28K. But for those earning more that average is meaningless.

Measuring average returns, is, in my opinion entrapment. If you have the skills to purchase your own stocks then returns of 10-20% should be achievable, especially if the pin stripped Mercedes driving middle man isn't living off you.

And including inflation as an offset comparison is, again in my opinion, a huge distraction. Inflation is a measure of goods and costs averaged out. Looking at the OP's stats I'd seriously question the returns on property at 10% pa. I'd suggest it's closer to 7%. And if you have the abilities to chose the right stocks I'd suggest 10-12% growth is reasonable.

And finally I wouldn't consider anything "This Is Money" have published to be worth the ether it consumes.

AiYn'U

[stressor]

thanks for your replies, I did a bit of research of my own. I found out these broad generalizations based on 100,000 users with open portfolios on [url]openfolio.com[/url]. The average return of private individuals is rooughyl half the market average (eg FTSE did 8%, private investor mananges 4%) and about one in three will be in negative balance (or loose money if they cash out). link https://www.creditdonkey.com/average-stock-market-return.html. Was hoping for more from the openfolio "insights" but cant find much on there.

[Howard]

So coming to my question, what percentage of stockmarket investors would make the following (after tax, including dividends if applicable) consisently (?ave over 5 years). Before some giant claims roll in remember Berkshire Hathaway averages 20.5% (albeit for more than 50years!)

-10% or lower
-10% to 0%
0 to 5% (slightly below market ave)
5 to 10% (slightly above)
10 to 20% (significantly above)
20% or higher (way above)

Most people expect 10% but realistically? https://www.thisismoney.co.uk/money/inv ... -year.html

Agreeing with other posters, the answer to your question depends on a lot of factors and the timeframe you choose.

Berkshire Hathaway only grew by around 8% per year over the last five years, nothing like 20.5%! I imagine a significant percentage of private investors reading Lemon Fool grew their portfolios faster than this, but probably took on more risk than Warren Buffett.

regards

Howard

[JohnB]

Private investors can underperform the market due to fees, both trading and custodial/management, and suffering from human frailty, buying high on atock tips and selling in a panic when their attempts to time the market go wrong. Me, I get market returns less 0.1% using trackers.

The OP quoted 10% property returns as an alternative, I'd not expect that going forward, for obvious reasons.

Not much point quoting Berkshire Hathaway, as you can always point to sucessful outliers with hindsight

[Arborbridge]

The OP quoted 10% property returns as an alternative, I'd not expect that going forward, for obvious reasons.

It may be that this is a highly skewed average. The average growth of my BTL portfolio in the Southampton area has been far below 10%. One quite decent flat in a middle class area held for about 8 years sold a couple of years ago for a total increase of only 11%. So it all depends....


Arb.

[colin]

My first stock market investment in an all share tracker fund was made in late summer 2007, so on the eve of the global financial crisis. To date my anualised return on that investment has been 5.64% acording to my platform's calculator. Bank of England inflation calculator indicates inflation averaged close to 2.8% pa over that period so a real return of 3.56% pa. Not very impressive given the volatility endured.

[Arborbridge]

My first stock market investment in an all share tracker fund was made in late summer 2007, so on the eve of the global financial crisis. To date my anualised return on that investment has been 5.64% acording to my platform's calculator. Bank of England inflation calculator indicates inflation averaged close to 2.8% pa over that period so a real return of 3.56% pa. Not very impressive given the volatility endured.

Equally unimpressive is my HYP with an XIRR of 6.36% from August 2006 or 7.32% from Jan 1st 2010 when the bulk of my HYP capital had eventually been invested.

For comparison, my income IT basket has given 8.94% since May 2009. Inc ISAs 12.35% from Nov 2008.

Sorry about the disparate dates, but that's just the way it happened.

Arb.

[tjh290633]

The value of my accumulation units may shed some light.

Date         Acc Units   Change Y/Y   5 Yr Change
31-Dec-98         5.89                           
30-Dec-99         6.85       16.25%              
31-Dec-00         6.68       -2.43%              
31-Dec-01         6.43       -3.85%              
31-Dec-02         5.23      -18.57%              
31-Dec-03         6.38       22.01%        -6.79%
31-Dec-04         7.59       18.92%        13.60%
30-Dec-05         9.69       27.62%        50.79%
31-Dec-06        12.25       26.43%       134.11%
31-Dec-07        12.41        1.28%        94.33%
31-Dec-08         7.41      -40.25%        -2.37%
31-Dec-09        10.24       38.09%         5.65%
31-Dec-10        12.32       20.30%         0.53%
31-Dec-11        13.45        9.22%         8.42%
31-Dec-12        15.80       17.42%       113.06%
31-Dec-13        19.56       23.81%        91.02%
31-Dec-14        20.34        4.00%        65.13%
31-Dec-15        21.42        5.33%        59.24%
31-Dec-16        24.37       13.78%        54.31%
29-Dec-17        26.70        9.54%        36.53%
31-Dec-18        24.06       -9.88%        18.31%
21-Dec-19        28.50                     33.05%

The annual changes are in the 3rd column while the 4th column gives the change over the previous 5 years.

TJH

[Dod101]

Sorry to go off topic but it amuses me that the evening before the shortest day and 3 days before Christmas we are (or at least some of us are) concerned about our investment returns! Someone may have beaten me to it, but may I wish all a very Merry Christmas and whilst I am at it a healthy and prosperous New Year (in that order, as Robin Angus of PAT would say)

Dod

[moorfield]

Sorry to go off topic but it amuses me that the evening before the shortest day and 3 days before Christmas we are (or at least some of us are) concerned about our investment returns! Someone may have beaten me to it, but may I wish all a very Merry Christmas and whilst I am at it a healthy and prosperous New Year (in that order, as Robin Angus of PAT would say)

Dod

Well I am concerned about my investment returns every day of the year, including the arbitrary date of Christmas.

Here at Moorfield Towers we celebrate Christmas, more traditionally, on 7 January - not a bank holiday of course so necessitates a day off work - as well as 25 December.

Merry arbitrary, and unorthodox, Christmas to you too.

[Dod101]

Well moorfield, you worry too much if you are concerned about your investment returns every day of the year. It matters not a whit if you worry or not, especially whilst the market is closed.

As to celebrating Christmas on the Gregorian 7 January, that is fine but are you not being a bit eccentric by sticking to the old Julian calendar which has not been in common use here in the UK for nearly 270 years? I have no problems with that of course as you will clearly be an Orthodox Christian in these circumstances. In wishing everyone a Merry Christmas you will note that I did not specify a date and for you to mention your date suggests an assumption which is entirely unwarranted. I embrace all Christians in my good wishes.

Dod

[moorfield]

. In wishing everyone a Merry Christmas you will note that I did not specify a date and for you to mention your date suggests an assumption which is entirely unwarranted.

Yes you did.

3 days before Christmas

[Dod101]

. In wishing everyone a Merry Christmas you will note that I did not specify a date and for you to mention your date suggests an assumption which is entirely unwarranted.

Yes you did.

3 days before Christmas

Well spotted.

Dod

[G37y]

ii
These are my yearly preformance results for the last few years. This years will be over 20% unless there is a serious market crash


08 minus39.6%
09 21.9%
10 45.7%
11 1.5%
12 27.5%
13 50.8%
14 44.8%
15 12.5%
16 minus7.81%
17 17.29%
18 minus15.10%

[BobbyD]

Just doing some basic research on expected returns. This article https://www.thebalance.com/good-rate-roi-357326 sugggests shares typically generate about 7% per year, property 10%. Looking at FTSE100 as a whole, returns ave around 3.9% over last 5 years, 8.8% over 10 years , 3.2% a year over 20 years and 6.4% over 25 years but *only with dividends reinvested*. Without dividends its 0% over last 5 years according to https://www.ig.com/uk/trading-strategie ... 00--190318. US equivalent is here https://www.getrichslowly.org/stock-market-returns/. There is also inflation and tax to consider.

So coming to my question, what percentage of stockmarket investors would make the following (after tax, including dividends if applicable) consisently (?ave over 5 years). Before some giant claims roll in remember Berkshire Hathaway averages 20.5% (albeit for more than 50years!)

-10% or lower
-10% to 0%
0 to 5% (slightly below market ave)
5 to 10% (slightly above)
10 to 20% (significantly above)
20% or higher (way above)

Most people expect 10% but realistically? https://www.thisismoney.co.uk/money/inv ... -year.html

This question reminds me of when during the poker boom it was suggested that under 5% of online poker players were profitable. There followed much indignation, but despite the massive data harvesting going on at the time absolutely no refutation.

What the game pays out on average may prove to be a very bad guide to what the average player is paid, and the chances of ever getting better than self reported data on a significant number of investors seem somewhat slim.