What is a good return on investment in this decade

A good return on investment is the amount you have, adjusted for the country's current purchasing power, to make sense for the risk involved. Thus, the number that matters isn't simply a percentage, but rather what you're left with after covering fees, taxes, and inflation.

Claims of 7% or 10% in a year might not be as relevant now or throughout 2030, and this article covers what a good investment looks like, with real data.

What is a good return on investment in the 2020s?

A good investment return in the 2020s is any percentage increase that builds wealth and also increases purchasing power. Historically, percentage increases of 5% or 7% are starting points of discussion and not a definition of success.

Historical returns reflect the prices, interest rates, and economic conditions investors experienced at the time. Your own result starts with today's purchase price, plus whatever income and growth follow from there.

Recent research on capital market assumptions compares historical annualized euro-asset returns against its 2026–2030 projections, and the forecast figure sits higher than the historical figure in every category reviewed.

A good return on investment this decade shows why assuming future returns must simply repeat the past is too simplistic and doesn't account for economic complexities.

Why the past 20 years are not a forecast for the rest of this decade

Historical returns reflect the prices, interest rates, and economic conditions investors experienced. Your result starts with today's purchase price and the income and growth that follow.

The S&P 500 is a familiar example. Its historical average is often treated as the return investors should expect each year. But that average brings together strong years, market falls, and recoveries. Someone investing today enters at one particular point in that story.

Bonds show the same importance of starting conditions. The price paid and the income available at purchase help shape the return that follows. A period of unusually low bond income is therefore an imperfect guide to a new investment.

Amundi’s 2026 research reported a historical annualized return of 2.4% for euro-area government bonds over 2005–2025, compared with a 3.4% annualized forecast for 2026–2030. These are nominal euro total returns before fees, covering bonds of different maturities.

Three differences actually matter:

• A company can keep growing and still deliver disappointing investment returns if its shares already reflect expectations of even faster growth. Buying a successful business at a high price is a different proposition from buying it before that success was widely expected.
• The S&P 500’s membership and company weights evolve. Its past performance came from a mix of businesses that differs from today’s. Technology was a major driver in 2025, for example, but that doesn't determine which industries will lead through 2030.
• Interest rates affect borrowing costs, inflation affects business expenses and household spending, and both influence company profits. An investment bought under one set of conditions cannot be expected to behave identically under another.

Historical return on investments: The S&P 500 benchmark

The S&P 500 is one of the most referenced long-term investment strategies for building wealth and even saving for retirement. While the S&P 500 has historically delivered returns on investments of 11.00% over the 20 years ending 31 December 2025 and 14.42% over five years, it's important to understand the context.

The US has long been the world's dominant economy, commanding significant market share and driving growth across global industries over the past two decades. However, that dominance is increasingly being challenged, as other economies begin to compete for influence.

This is why the S&P 500 benchmark explains the appeal for US equity investing. Euro-based investors also carry currency exposure: holding an S&P 500 ETF priced in euros doesn't eliminate the underlying dollar risk. Thus, a bond portfolio, global equity fund, or mixed allocation each needs its own appropriate benchmark, and not just the S&P 500 by default.

From our research on how "good" returns are reported, they are all using the S&P 500 benchmark, which has generated, according to our calculations, 10.487% over the last 100 years. The benchmark is calculated without considering inflation, fees, or taxes.

While these are helpful reference points, every investor has to make their own calculations based on local jurisdiction and tax laws.

What Is a Good Return on Investment Over 1 Year?

A good one-year return compares favorably with investments carrying similar risks over the same twelve months.

For example, a hypothetical 4% result needs context. It could compare well with similar investments returning 3%. It could compare poorly with equivalent investments returning 8%. Neither comparison is useful if one side involves much greater risk or leaves out fees.

This matters especially when you need the money within a year. Access to the original capital then has a practical value that a headline return does not capture. A deposit, a money-market fund and a share portfolio have different protections and possibilities for loss.

If you need to withdraw the full amount next year, compare access terms, potential capital losses, and costs before reaching for a stock-market average. Thus, a return is hard to call "good" if earning it required risking money you couldn't afford to lose.

What Is a Good Return on Investment Over 5 Years?

Five years gives compounding more time to work, but it doesn't guarantee a positive equity outcome.

For example, a 5% annual return compounds to about 27.6% over five years, while 7% compounds to roughly 40.3%. These are calculations, not forecasts, and they assume reinvestment throughout. The same annualized result can also emerge from very different sequences of gains and losses along the way.

To keep this article's 2030 deadline consistent, the table below uses four full years, January 2027 to December 2030:

Assumptions: four full years starting January 2027, reinvested income, no additional contributions, hypothetical annual inflation of 2.5%, and no personal tax applied. These figures are illustrations, not forecasts or limits on possible losses.

How Much of Your Investment Return Do You Actually Keep?

You keep the return left after investment costs and applicable taxes, and inflation determines how much additional purchasing power that money provides.

Inflation doesn't appear as a line item on your account statement; its impact shows up at the checkout. That's why a positive return on paper can still leave you with less purchasing power than you'd expect.

ESMA's March 2026 report illustrates this with a hypothetical €10,000 retail fund portfolio (40% equity funds, 30% bond funds, 30% mixed funds) tracked over 2020–2024.

The investment finished at €12,207 after ongoing costs, while the final amount reached just €9,956 after accounting for inflation. While investors earned more on paper, the amount someone could spend was much less since inflation grew higher.

When you're assessing your own returns, it's important to account for three variables:

• Investment costs: fund expenses, account charges, dealing costs, spreads, and currency conversion fees.
• Inflation: the rise in prices over your actual holding period, not a generic long-term average.
• Taxes: the specific rules that apply to your residence, account type, and investment category.

Currency exposure can shift the outcome further since an asset gaining 8% in dollars while the dollar weakens 10% against the euro produces a euro-denominated return of approximately −2.8%. So investors lose money rather than earn more.

Why are investment return expectations too optimistic in 2026?

Return expectations can become too optimistic when investors treat strong historical gains as repeatable future results, or mistake a headline percentage for growth after inflation.

Individual investors, compared with financial professionals, have 2.5% higher expectations for recurring returns than historical data. Individuals expect +10.7% returns, while financial professionals expect +8.3%, based on a survey conducted by Natixis.

An expectation stated "above inflation" also sets a notably higher bar than the same percentage stated before inflation. A market gain of 10% in a given year doesn't mean a 10% real return is a repeatable annual outcome.

Thus, before accepting any return figure at face value, establish what it actually measures: a historical result, a modeled projection, a contractual payment, or simply someone's expectation. That distinction matters more than how attractive the number looks on its own.

What returns can different financial investments offer?

Cash and bonds mainly offer income; funds combine underlying holdings, such as an ETF structure, while shares combine possible dividend income with growth or losses in their market value. There are different mechanisms that are part of alternative investment strategies which shy away from the equity market.

The following figures illustrate how one research team views that trade-off. They are Robeco's nominal annualized euro assumptions for 2027–2031, extending beyond this article's 2030 deadline.

For long-term growth, diversified equity funds provide exposure to company earnings across businesses and markets. Their attraction is participation in that growth without depending on one company. Diversification still leaves the possibility of a broad market decline, including just before 2030.

An ETF can hold shares, bonds, or other assets, so “ETF returns” are not a separate category. The underlying holdings explain the return potential. Our guide to types of investments explains these differences in detail.

For diversified equity exposure, funds spanning multiple sectors and countries offer long-term growth potential tied to global company earnings; however, their potential comes bundled with periods of loss.

Within Europe, a handful of thematic areas are worth watching based on existing policy and research activity, while recognizing that strategic importance doesn't automatically translate into attractive share prices:

• Semiconductors and related technology: the Dutch government's 2026 Semiconductor Vision outlines ambitions through 2035, with listed shares and sector funds offering possible exposure.
• Electrification and energy infrastructure: the energy transition requires networks and equipment, though grid constraints and project economics create real headwinds for specific companies.
• Life sciences and health technology: the Netherlands has an established research ecosystem, but commercial success still depends on individual products, trials, and financing.

For inflation-beating returns, equities offer long-term potential, while inflation-linked government bonds provide an explicit, contractual link to a specified price index. France's OATi and OAT€i link to French and euro-area inflation, respectively — though purchase price, real yield, costs, and your personal spending inflation still all matter. Inflation-linked bond funds can still fall in value when real yields rise; the inflation label protects the payout structure, not the market price. Ordinary bonds and cash only beat inflation when their net return exceeds the inflation actually experienced over the holding period.

Higher advertised income may compensate for default risk, restricted withdrawal terms, or difficult valuations; a quoted coupon or distribution is not the same as total return, and payment ultimately depends on the issuer meeting its obligations.

Tips to Judge Whether Your Investment Return Is Good

Match the benchmark to the portfolio. Compare euro results with euro results, over identical dates, including income consistently. Don't judge a bond-heavy portfolio against the S&P 500 alone.

Measure growth separately from new deposits. Adding €2,000 to a €10,000 account doesn't create a 20% investment return. Time-weighted returns isolate investment performance from your own contribution timing; money-weighted returns reflect the actual size and timing of your cash flows.

Use tracking tools that answer the right question. Platforms such as Interactive Brokers' PortfolioAnalyst offer both measures alongside benchmark comparisons, while tools like Trading 212's Portfolio Charts include a money-weighted view next to unrealized results. Available features and account terms vary by provider.

Choose a platform for access, cost, and clarity, not popularity. Compare fund choice, dealing and currency costs, reporting quality, and country eligibility before deciding where to invest.

Review the risk behind the result. A large gain from one concentrated position is a fundamentally different outcome than a diversified portfolio's return. Weigh the losses you could realistically face, whether you can withdraw funds when you need them, and whether any fixed payment depends on a single issuer's solvency.

Keep the goal visible. Track both investment performance and your progress toward the actual amount you need. If your plan relies on consistently exceptional returns, revisit your contributions, timeline, or goal before taking on more risk.

Final Words

A good return on investment in this decade is what remains meaningful after adjusting for inflation and understanding the costs. What's even more important are the risks you are taking to reach those returns.

It's always important to use historical results to understand what has happened rather than to hope for the same results to happen again. Forecasts could be used to explore what could happen and then build a strategy that is lower risk and targets a realistic goal, rather than what's been described as "the norm".

Yieldfund offers investment plans with known returns upfront that pay out weekly, up to 36% in weekly returns. If you want to explore how Yieldfund works and understand our bond structure, reach out to one of our account managers directly.