Average returns can vary widely, so it's important to view the larger picture before making investment decisions. As the above table shows, returns are inconsistent within the investment period of 1926 to 1999. Although that difference alone is enough to make you want to re-evaluate your assumptions, it's not the only consideration. Investing Costs and Inflation Other factors also affect your returns. Investment costs such as brokerage commissions, fees and operating expenses lower your returns.
Annual expenses vary depending on the kind of investment.
State and federal income taxes can further erode the return on your investment. Inflation also affects your investment returns. Recall the inflation variations in the preceding table. Balance Is Key A balanced portfolio can help offset the fluctuations of the markets. Once your long-term plan is in place, resist making alterations based on market movements.