Real rate of return

(redirected from Real Returns)

Real rate of return

The percentage return on some investments that has been adjusted for inflation.

Real Rate of Return

The rate of return on an investment after adjusting for inflation. It is calculated simply by taking the gross return and subtracting the inflation rate. For example, if the return on an investment is 7% and the inflation rate is 4%, the real rate of return is 3%.

Real rate of return.

You find the real rate of return on an investment by subtracting the rate of inflation from the nominal, or named, rate of return.

For example, if you have a return of 6% on a bond in a period when inflation is averaging 2%, your real rate of return is 4%. But if inflation were 4%, your real rate of return would be only 2%.

Finding real rate of return is generally a calculation you have to do on your own. It isn't provided in annual reports, prospectuses, or other publications that report investment performance.

References in periodicals archive ?
But investors often make the mistake of concentrating on nominal rather than real returns (that is ignoring the effects of inflation), and, if inflation is set to remain low, which seems to be so, shares yielding between three and four per cent with dividend growth as low as three per cent offer a potential total real return of four to five per cent, which is still pretty attractive.
is means there are 187 Isa and non-Isa savings accounts on the market which oer real returns.
This means that in total, just 84 out of 862 Isa and non-Isa savings accounts on the market will offer real returns when both tax and inflation are taken into account, according to Moneyfacts.
Experts expressed concern that Government policies have driven some hard-pressed households to give up trying to save for a rainy day as they continue to grapple with high living costs and poor interest rates which fail to give them any real returns.
Over the past 10 years, Bona Fide Real Returns have ranged from marginally positive at 0.
Real returns matter if you are genuine about truly funding a secure retirement, that future dream home, or a world cruise with your best friends.
In London, winners of The Banker's Investment Banking Awards were announced at a ceremony for innovative transactions, panel of independent judges looked and generated cost savings, risk reduction and real returns for clients.
Our estimates of the most probable pre-tax real returns for a constant maturity ten-year Treasury note over the next ten years range from ten to 100 basis points, depending on how quickly real yields return to long-term equilibrium levels of 230 basis points.
4 percentage points higher future real returns than those who were shown the 4.
Sections III, IV and V, discuss nominal returns, real returns, and U.
5% / 2) 4/15/2007 $115,787 $1,890 $51,447 10/15/2007 115,344 1,890 1,442 4/15/2008 114,896 1,890 1,436 10/15/2008 114,442 1,890 1,431 (1) (5) Premium to Payment amortize (3)-(2) 4/15/2007 $5,443 10/15/2007 448 4/15/2008 454 10/15/2008 459 Exhibit 2: After-tax real returns for TIPS held in taxable accounts assuming different real returns, inflation rates, and tax rates 15% Tax Rate Annual Inflation Rate (Percent) 1% 12.
Real returns are what you are left with after inflation - the rate at which the price of consumer goods is rising - and tax are stripped out.