Does that mean over 10 years the average return was 11% per year? or after 10 years I would have a 11% return?
hence
$10->$28.39
or:
$10->11.10
2006-10-28 20:59:54 · 6 answers · asked by 33ea 3 in Business & Finance ➔ Investing
It means that the average return was 11% per year. But be very careful. Past results do not guarantee what future results will be. Also you should look into those numbers more carefully. Most mutual funds will give you figures for the past year, the past three years, the past five years and the past ten years. The more recent history (one to three years) is a better indicator than the ten year history. It's also important to look at how it did in both up markets and down markets. The last three years has generally been an up market. Did the fund perform as well or better than the Standard and Poors 500 index? The period from 2001 to 2003 was a terrible down market. Did they perform as poorly or better than the Standard and Poors 500 index during this period?
2006-10-29 01:57:41 · answer #1 · answered by Tom D 2 · 0⤊ 0⤋
None of these previous answers are correct. That is an ANNUALIZED return, taking into account compounding of the gains the year before. So if you start with $1000, after the end of 1 year you would have 11% more, or $1100. The next year, you make 11% of $1100, for a total of $1232.10, and so on.
A true arithmetic average wouldn't work. Say you started with $1000 again, the first year it went up 100%, to $2000. The next year, you lost 50%, back down to $1000. The average return would be +25%, but how does that make sense if you have the same amount as your started? You have a annualized gain of 0%.
If it made 11% total over 10 years, or 1.1% a year, it would be time to look elsewhere to invest.
2006-10-29 05:18:55 · answer #2 · answered by 12 November 3 · 0⤊ 0⤋
It means that the average every year is 11%. For instance, one year could be 13% and the next year could be 10%. It would average out to 11%. Mutual Funds are the best investment out there, just make sure you pick a good quality fund.
2006-10-28 21:29:26 · answer #3 · answered by dkwr14 3 · 1⤊ 0⤋
If you want the diversification of mutual funds without the fees. Look at ETFs Exchaange traded funds. Vanguard, for example, has a complete list of sector based funds with an expense ratio of less than 30 basis points which is 1/3 of 1% compared to mutual funds expenses of greater than 1%-2%. You can buy a group of sector based ETFs to create a very diversified equity portfolio that is very transparent and liquid. See the web page I have included for examples. And if you would like assistance you can email or call me. D Sivel http://home.comcast.net/~dsivel/...
2006-10-29 03:25:31 · answer #4 · answered by David S 1 · 0⤊ 0⤋
11% per annual return average, over a 10 year period.
2006-10-28 21:18:39 · answer #5 · answered by Michael K 3 · 0⤊ 0⤋
11% per year, which is not shaby
2006-10-28 21:42:50 · answer #6 · answered by acid tongue 7 · 0⤊ 0⤋