15% annual returns is realistic? (2024)

FAQs

Is 15% annual return realistic? ›

It is not worth your time to do any investment if it cannot bring you 12 to 15 percent per year. Investing properly is not a gamble. We should not lose money in the stock market on a long term basis. In fact, a near guaranteed return of 15% or higher is a realistic expectation.

Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns -- perhaps even negative returns. Other years will generate significantly higher returns.

A realistic rate of return for retirement depends on your asset allocation, investment management fees, inflation, and taxes. As a result, calculating your real rate of return means accounting for these factors when assessing your investment gains.

To calculate the average rate of return, add together the rate of return for the years of your investment, and then, divide that total number by the number of years you added together.

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.

That often cited 10-per-cent return for stocks based on the post-1950 period is roughly equivalent to a 7-per-cent real return in the historical data. That is about 2 per cent higher than unbiased estimates of U.S. expected returns, U.S. equity returns before 1950 and global stock returns spanning 1890 through 2023.

The rule says to achieve the goal of earning Rs 1 crore, an investor should invest Rs 15,000 monthly through SIP for 15 years, considering a 15% annual return from an equity fund. Consistent adherence to this strategy can lead to significant wealth accumulation.

More About the 15x15x15 Rule for Mutual Fund Investments

It says that if you invest Rs. 15,000 per month via SIP in an equity mutual fund that is capable of generating an average return of 15%, you are most likely to become a crorepati in 15 years (as stated in the example above).

It's the million-dollar question — quite literally: How much should I save for retirement? There is a general rule of thumb: When saving for retirement, most financial experts recommend an annual retirement savings goal of 10% to 15% of your pre-tax income.

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.

What is a reasonable rate of return? ›

A good return on investment is generally considered to be around 7% per year, based on the average historic return of the S&P 500 index, adjusted for inflation.

Fair rate of return. The rate of return that state governments allow a public utility to earn on its investments and expenditures. Utilities then use these profits to pay investors and provide service upgrades to their customers.

Stock market investments have the potential to generate high returns over the long term, but there is higher risk because of the market volatility. The average annual return from the stock market in India is expected from 12-15%. It varies from company to company.

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.

Over the past decade, you would have done even better, as the S&P 500 posted an average annual return of a whopping 12.68%. Here's how much your account balance would be now if you were invested over the past 10 years: $1,000 would grow to $3,300. $5,000 would grow to $16,498.

While the term good is subjective, many professionals consider a good ROI to be 10.5% or greater for investments in stocks.

A good return on investment is generally considered to be around 7% per year, based on the average historic return of the S&P 500 index, adjusted for inflation. The average return of the U.S. stock market is around 10% per year, adjusted for inflation, dating back to the late 1920s.

For a successful retirement, you should aim to save at least 15% of your income annually over the course of your career. Saving steadily and increasing your contributions periodically should help you hit that target over time.

A 20% return is possible, but it's a pretty significant return, so you either need to take risks on volatile investments or spend more time invested in safer investments.