Ask questions via Twitter. Tweet any question to @AskFiLife and we will respond with an answer. More.

FiLife - In partnership with The Wall Street Journal

Your Financial LifelineTM

In partnership with The Wall Street Journal
 
 

This answer is from My personal rate of return is -4.18%, is that bad?

Michael Kitces
FiLife Contributor
8 months ago

Bichiluz,
The short answer is that a return of -4.18% may be good or bad, because it depends on what you're measuring it against.

Compared to some stock indices that have declined by 30%-50% over the past year, "only" -4.18% looks quite good. But compared to the returns on cash, which are positive, it looks "bad" because you lost money.

Not knowing what you're invested in, it is difficult to assess whether your return is good, bad, or "normal" because we can't be certain what you're comparing it to.

Generally speaking, though, a lot of people have lost a lot more money than this in various investments over the past year or so, which means it's probably not too bad to say the least.

I would encourage you to get a handle on what it is that you're actually invested in that produced this return, and see if you can find an appropriate index or "benchmark" to compare it to for performance. You may find that your 401(k) provider has some helpful information on the performance of this fund compared to appropriate benchmarks.

I hope that helps a little!

Is this helpful?

Yes

(0)

No

(0)

Permalink | Abuse

Login or Join

or login with

Expert Partners

Ask a Question

140 characters

Stacker Poll of the Day

What age should you start your child's allowance?

Avg 8.5
 
Avg 8.5
 
248 responses