The real annual total equity returns of approximately 10% may be compared to the findings of Wharton Professor Jeremy Siegel--the stock market has generated an annual average,
inflation-adjusted return of 6.
Using this strategy we find that Zimbabwe's stock market had the greatest nominal return while Kenya's had the lowest return; Botswana's stock market had the best
inflation-adjusted return while the stock market of Kenya had the worst return; and Zimbabwe's stock market had the best U.
Considerations such as current spending requirements, tax implications, and
inflation-adjusted return may also be addressed through the asset-allocation process.
From Table 2, commercial real estate generated an average annual
inflation-adjusted return of 3.
The average
inflation-adjusted return on pension accounts was 8% in 1998, with that return averaging 11% in the first half of this year.
Since the bonds will have a higher
inflation-adjusted return than regular bonds or money market funds have earned historically," he notes, "they may be used as a substitute for stocks when the equity market looks expensive.
Once these costs are factored in, the
inflation-adjusted return becomes negative.
In addition to the constant dollar security we include
inflation-adjusted return indices for five other financial asset classes: (1) U.
Real return: The
inflation-adjusted returns of an investment.
The first of these concerned the UK equity markets and returns to shareholders: the annual
inflation-adjusted returns on British pension funds in 2000-09 averaged only 1.
Using these
inflation-adjusted returns, we find that there is still substantial evidence of excess return predictability in liquidity-adjusted inflation-indexed bond returns as well as in breakeven inflation returns in both the US and the UK, which we interpret as evidence of a time-varying real interest risk premium and a time-varying inflation risk premium.
5% within a month, offering better
inflation-adjusted returns than most emerging markets.
