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Real return

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Real Return
The return on an investment after taking inflation into account. To calculate the real return, simply subtract the inflation rate from the stated return.

 


Also called Purchasing power risk, the Risk that changes in the Real return the Investor will realize after adjusting for Inflation will be negative.

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Real Return
The rate return earned on an investment after adjusting for the rate of inflation.

Real Returns - Inflation
And there is the bigger factor of inflation. Inflation, measured as an annual percentage increase, is a sustained increase in the general level of prices for goods and services.

Real Return: An inflation-adjusted return. It is the return, that when compounded with inflation gives the nominal return for the same security.

Real Returns, Investing Versus Speculating and Planning and Setting Goals
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A Real Return
We were able to verify the success that King Midas claimed. The 852% return of his portfolio is real.
This means that the "folklore" of the market can be done. A ten-bagger in one year is possible.

Although these are real returns some investors have achieved, they're not the sort of realistic earnings anyone can expect over the long term. You can't extrapolate Usain Bolt's 100-meter times to conclude that he could run a marathon in 70 minutes.

Inflation riskAlso called purchasing-power risk, the risk that changes in the real return the investor will realize after adjusting for inflation will be negative.

Over the last century and more, and allowing for dividends too, the real return on US equities has typically been negative when gold was up, and positive when gold was down.

A type of investing or budgeting style for which real return rates or periodic income is received at regular intervals at reasonably predictable levels.

Oppenheimer Real Asset Fund
PIMCO Commodity Real Return Strategy
S&P GSCI Commodity Index
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According to Research, Stocks Generate Higher Real Returns than Real Estate
By Joshua Kennon, About.com Guide
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The ten percent ROC requirement is really a rough rule of thumb. It is meant to prevent you from investing in underperformers. If a company can't generate a return on capital substantially greater than its cost of capital, then real returns aren't ...

This is the only way to consistently compare returns among different securities. That is, a $10 return on a $100 investment would be equivalent to a dollar return on a $10 investment. Real returns are important as opposed to nominal returns.

See also: Return, Investment, Market, Stock, Vesting

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