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Your
Personal CARES Assessment |
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WHAT DETERMINES INVESTMENT RESULTS
This illustrates just how important it is to understand what factors impact investment results and what it means to you. With this knowledge, there are few surprises and you can compare various investments based on historical performance to make more informed investment choices. It is important to remember that past performance doesn’t guarantee future results. However, it does provide valuable perspective. ValueMeterTM, a proprietary service we offer, is an objective, easy to use, yet comprehensive computer program designed to simplify these complex issues and calculations. Is this type of valuable information important to you? |
Investment
results are determined by more than just performance. “Performance”
is the starting point. From there, you must consider the length of
time a specific amount of money will be invested and then deduct the
expenses related to managing your money. Remember, every investment
has expenses. Expenses are either not disclosed, partially disclosed
or fully disclosed. From that performance amount, you must deduct
taxes (either now or in the future). Then, you must adjust for inflation.
For example, if you have a $10,000 CD and it earned 4% (net of expenses)
on average for 30 years, you would have $32,400. If you’re in the
25% tax bracket and inflation averaged 3%, the real value
of the CD at the end of 30 years would be only $13,400. This is an
actual gain of only $3,400 on a $10,000 initial lump
sum investment over 30 years! This represents an
average annual rate of return of .9%.
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