Yahoo "Finance Quiz"

Having lurked on retirement planning boards for quite awhile, I have have 2 recurring questions -
why is past return data used but not past investment costs? and why is past foreign data not included? Past commissions were higher, and surely in the past some investor in the U.S. owned a few failed Argentine bonds. The more academic articles I read, the lower past average returns seem to fall.


(and its hard to use dryer sheets on my clothesline)

why is past return data used but not past investment costs? and why is past foreign data not included? Past commissions were higher, and surely in the past some investor in the U.S. owned a few failed Argentine bonds. The more academic articles I read, the lower past average returns seem to fall.

I believe that the reason Foreign Data is not included is that it is simply not available in the same accurate form that the US data is.

As far as investment costs. FIRECalc will let you plug in any investment costs that you would like and see if your portfolio would have survived in past periods.

Have you tried FIRECalc yet?

I've played with Firecalc some in the past.

Dimson, Marsh and Staunton have done some studies of international investment returns. If I was to use the Belgian average, we'd be talking about that sizzling 2% past real stock return before expenses (not the U.S. 6-7%).

I have been suprised at how high past investment costs were estimated to be, up to 2% of stock return and 1% of bond return.

I've come to suspect that in the past, an average investor in the U.S. made about 3% real return from a mixed stock, bond portfolio after expenses (tax deferred) while saving, and close to 0% after taxes while spending.

Its interesting that studies of brokerage accounts show average results in the 3% range.