The reward for equity risk is slow
Broad, diversified equity indices have historically compounded around 7-10% a year nominal over the very long run, with multiple 30-50% drawdowns along the way.
What it means for your portfolio
Equity returns show up over decades, not quarters — the drawdowns are the price of admission.
Does this apply to your holdings?
Get a free PortLens risk snapshot — your concentration, drawdown sensitivity and more, in plain English. No signup.
Run my free snapshotMore on Costs & compounding
Fees compound too
A 1% annual fee can consume a large share of lifetime returns once compounded over decades.
Rebalancing enforces discipline
Periodic rebalancing systematically trims what's grown and tops up what's lagged.
Turnover has a tax cost
Frequent trading can trigger capital gains and reduce compounding; in Australia, holding an asset over 12 months can access the CGT discount.
General information only, not financial advice. Historical figures are approximate and provided for education.