compounding

In response to my recent post about estimating the true cost of ongoing spending, a reader (and blogger) named Edward said: On the flip side, I’m on track to have a fully funded retirement when I am ready to retire. Why forgo a pleasure now to have more money than […]

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Percentage Losses, Percentage Gains

by Michael on Aug 8, 2013 · 3 comments

As a followup to my post about predicting portfolio growth, I wanted to share a few more thoughts on how misleading percentages can be. When thinking about the effect of percentage gains and losses on the value of your investment portfolio, it’s important to keep in mind that they don’t […]

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When evaluating investments, you’ll often run across “average” return values. As useful as these numbers seem, they can be misleading. Why do I say this? Because they’re almost certainly arithmetic averages. Thus, they ignore the effects of volatility and overstate the returns that you can actually expect. Not sure what […]

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