Money For The Rest Of Us

Why Are Investment Returns So Low?

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#204 How low real interest rates contribute to low returns for stocks and other risk assets. How real interest rates are determined. More information, including show notes, can be found here.Episode SummaryLow investment returns are never the best news for financial investors. On this episode of Money For the Rest of Us, David examines the relationships between real interest rates and investment return, who or what is driving real rates, and offers historical information on previous periods of low rates. His insights will shed light on this concerning issue, so be sure to give this episode your full attention.The US and the world are in a period of low real interest rates and real returnsUniversity endowments, retirement funds, and individual portfolios are currently affected by low-interest rates and low investment rates. If this continues, overall portfolio values could decrease after adjusting for inflation and spending. In the United States, we have seen an average 6.5% real return on stocks since 1900. T