What's the average percentage profit you can make on the stock market?

Question

I know that shares can go up and down and I know that the market itself can go up or down but, on average, what kind of profit can you make per year on the ftse 100?

By the way, I'm just thinking in terms of putting money directly into shares keeping my costs down to brokerage fees alone.

Answer 1

Noone knows. The 200-year average has been a 7% annualized real return, which would translate into a 10% nominal return if inflation is 3%. However, very few 10-year or 30-year periods have actually produced a 7% real or 10% nominal return. A lot of people don't realize this. They assume long-term market returns have always been 10% annualized, but don't bother to actually look it up to see for themselves. If these people did, they would be in for a surprise.

The market has gone through extensive, multi-decadal periods of very high returns followed by multi-decadal periods of very low returns. The numeric average is somewhere in-between (7% real return), although the market did not actually give that return during any decade. The entire decade of 1970 - 1979 produced a real return of MINUS 1.4% here in the U.S. Then, in the 1980's, the annualized real return was 11.8% followed by the annualized 14.8% real return of the 1990's, more than twice the 7% real return 200-year average. There have even been 3 seperate 20-year periods in the 1900's where the stock market gave a real return close to zero. During these times, stock investors were no better off 20 years later, in terms of the purchasing power of their money. And there have been long periods where bonds produced serious real losses, worse than stocks. From 1966 to 1981, U.S. Bonds produced an annualized real return of NEGATIVE 4.2%. So much for a "safe investment", hey? Yet, it's all true. Shocking, isn't it?

In actuality, the Gordon Equation is predicting that the U.S. stock market will provide 7 or 8% nominal returns (or 4 - 5% real returns) over the next 30 years, a far cry from the 10% nominal return (7% real return) often quoted. The stock market does not give predictable returns and does not obey our man-made rule of 10%.

Download my free book at http://www.invest-for-retirement.com and read chapters 21 and 22 to get an overview of past and possible future returns. There is a link to a reference on the web as well as info from the 27 books I cited in my bibliography. However, everyone is free to believe as they wish. They can keep quoting "10%" if they like. Doesn't necessarily make it true. But it is certainly more comforting to just say "10%" than to face reality.

Answer 2

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Answer 3

Profit Stock Market

Answer 4

I sell if I think it is more likely to go down than up. How much I made or even lost doesn't matter. That said, the more it goes up the more likely it is to retrace, lose, those gains. I too use stop losses. The more likely I think the stock might go down the tighter I make the stops. I raise them closer to the price. But I like that method to sell because it allows a stock to keep going up if I am wrong. Good Luck

Answer 5

You can only know the average from past years. But the past does not necessarily predict the future.

People can tell you how much money you could've made if you had invested some money a few years ago. But nobody can tell how much money you can make in the future by investing in stocks now. Perhaps instead of making money you can loose money by investing in stocks now.

People can make an educated guess. But nobody can foretell you the future for sure.

Answer 6

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Answer 7

I every time spend my half an hour to read this blog's posts daily along with a mug of coffee.

Answer 8

Inflation rate + 7%.

Roughly 10% per year in the USA over long periods

Answer 9

in the long term the general rate of return is 10%. that is the longterm outlook it my go up 20% one year and down 15% the next.

Answer 10

if you know what you're doing, the sky is the limit, if not hell is waiting for you

do lots of research before committing buying into stocks or investments