Average Investment Returns By Asset Class
Must be a valid email address.
Password must be 8-64 characters.
Must be a valid phone number.
Recession incoming? Here’s how you can prepare.
Daily Capital
Home>Daily Capital>Investing & Markets>Average Investment Returns By Asset Class

Average Investment Returns By Asset Class

What is the best investment? According to Benjamin Franklin, “an investment in knowledge pays the best interest.” While Ben was probably not referring to knowledge in the form of infographics, we think they can be pretty handy.

This infographic might be able to help you find that higher interest Ben is talking about. It shows past investment returns by asset class. What’s the average? Well, investors in blended mutual funds – which have both stocks and bonds – saw their investment grow less than 3% per year on average. This 3% benchmark stays fairly constant across any long-term period. The 10-year annualized return is 2.6%, the 20-year return is 2.5%, and the 30-year is lower still at 1.9%.

Be careful – averages above refer to mutual fund investors, not the index. What’s the difference? Investors’ returns are influenced by when they traded in and out of the mutual funds, while the index a measurement of the overall market.

Stock and bond-only investors performed no better relative to their indexes.  The average investor in stock mutual funds actually earned only 5.9% annualized over the past 10 years. Bond mutual funds earned an astonishingly low 1% annualized over the same time period. Check out the infographic to see how much more the index earned.

Why do humans perform worse than the index? Studies have shown humans can have tendencies to buy high and sell low, instead of the reverse. So timing the market is more likely to hurt you than help you in the long-term.

The average here includes professionally advised investments as well as self-advised investors, and comes from the 2014 Quantitative Analysis of Investor Behavior (QAIB) by Dalbar.


the people v the index

Maximize Your Investment Returns With Personal Capital Today

Photo credit: Giallopudding (Pixabay)

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Kate is fiercely dedicated to solving the retirement crisis in America and helping women tackle money issues. She was a VP in the Office of the President and Chief Operating Officer at BlackRock before leaving to Harvard, where she's currently pursuing her JD and MBA degrees.
Icon Close

To learn what personal information Personal Capital collects, please see our privacy policy for details.

Let us know…

This year, my top financial priority is:

Building my emergency fund
Paying off high-interest debt
Budgeting better
Saving for a short-term goal, like a vacation or new car
Increasing my investment contributions
Maintaining status quo - I’ve got this under control

Make moves toward your money goals with Personal Capital’s free financial tools.