What are realistic expectations of market returns?

When talking to people it amazes me how high people’s expectations are of returns they could achieve from investments – often so high as to be unrealistic. When pressed, most cannot describe the evidence on which they base their expectation.

What are your expectations of the returns you will achieve from your specific investments? What evidence have you used to shape your expectations?

To help you manage your expectations it is useful to consider what has been achieved in the past. Vanguard Investments Australia has created a flexible tool for looking at historical market returns since 1970. You can even select individual years and see what the best, worst or average return was for each investment market. Check out the Vanguard tool here.

(If you know of any other great tools out there on the internet please let me know by leaving a comment below.)