What investment returns should you expect with different investing goals, risks, and durations?
Contents
The Average Investor
The average investor over a medium-long term time frame and with proper investment planning can achieve returns above 8% compounding annually. However, less than half of people are actually invested in the stock market despite it being a recommended part of an individual’s portfolio (with properties being the other “must-have” recommendation). Consider that the average long-term market returns are as follows:-
- Bursa Malaysia: 8.9%
- US Markets (S&P 500): 9.8%
Note: Most people are closer to average than they think. You’re not as good as you think you are hotshot with your lucky streak. And you’re not going to fail forever even if you made some mistakes.
Key Questions to Consider in Investing
- What is your personal investment plan?
- What is your capital, and additional investment fund flow?
- What is your investment timeline/horizon and investment goal?
Investment Assets Consideration
| Investment Asset | Risk | Duration | Returns |
|---|---|---|---|
| EPF | Low | Long | 6% |
| FD | Low | Short/Med/Long | 4% |
| Endowments | Low | Long | 6% |
| Annuities | Low | Long | 5% |
| Private Pension Schemes | Low/Med | Long | 6% |
| Low-Risk Bonds | Low | Short/Med/Long | 5% |
| Gold and precious metals | Low/Med | Short/Med/Long | 2% |
| Properties | High | Med/Long | 15% |
| Shares Investing | High | Med/Long | 15% |
| Shares Trading | High/Very High | Short | 25% |
| ETFs | Med/High | Med/Long | 8% |
| REITs | Med/High | Med/Long | 6% |
| Unit Trusts | Med/High | Med/Long | 6% |
| Forex | High/Very High | Short | 25% |
| Commodities | High/Very High | Short | 12% |
| Cryptocurrencies | Very High | Short/Med | 200% |
Note: Risk, duration, and returns are somewhat subjective based on an average or most common approach.
More Info
- EPF
- FD
- Endowments
- Private Pension Schemes
- Bonds
- Gold and precious metals
- Properties
- Shares
- ETFs
- REITs
- Unit Trusts
- Cryptocurrencies
For any classes of investment, the risk fluctuates greatly from person to person due to information accessibility and application of knowledge relative to the others.