About 15 years ago, some radio guru of the time mentioned what he called the "Rule of 8" - An Investor's holdings should double in value every 8 years. Wondering if anyone else's come across that? A Google search came up empty - except for the Rule of 72 (linked). It shows that at 9% compounded, an investment doubles about every 8 years. 15 years ago that was probably reasonable. Today's lower interest rates make me wonder. Maybe still reasonable for a 30-40 year old? But, what's considered a reasonable return on investment at age 60 or 70 - with shorter time horizons? Related: BobC mentions growth in frontier markets. I agree. But - yikes, probably not area 70 year olds should play in - unless they have some special expertise.
Rule of 72 explained:
http://www.directinvesting.com/drip_learning_center/rule_of_72.cfm?from=kids
Comments
15% / year = Rule of 5. In retrospect impractical. Rule of 8 more realistic. I like.
HOWEVER, I do have a different rule of 5. After I buy a fund, 5 years later if it has not given me positive return, I sell. And this is REGARDLESS of how its peers or indexes performed. I don't care who you are / what you are investing in. After 5 years you cannot match the return of cash, there is no excuse.
If upward movement after 3 years is not evident, can't see why waiting 2 more years is useful. Does anyone have reference to support the extra 2 years?