Where to Invest: Stocks, Bonds, Gold, or Real Estate? 30-Years of Data

Trading and investing is an exciting way to grow wealth over time. I’ve researched the potential returns across all asset classes to help set realistic expectations. While stocks have historically offered higher average yearly profits compared to other investments like gold or real estate, it’s important to approach the market with a clear understanding of risks and rewards.

In this article, I’ll explore some real-world examples of stock market returns and provide a guide on setting achievable trading goals. By looking at long-term data and trends, we can gain valuable insights into what’s possible when investing in the stock market.

30-Year Research: Returns for Stocks, Bonds, Real Estate, Gold, and Treasuries

I’ve compiled a table showing the 30-year compound annual returns for various investment assets from 1995 to 2025:

Asset	30-Year Compound Annual Return
Nasdaq 100 Index Fund	13.10%
S&P 500 Index Fund	8.20%
Corporate Bonds	7.20%
Gold	6.80%
US T. Bond	4.90%
Real Estate	4.80%
3-month T.Bill	2.20%

The Nasdaq 100 Index Fund tops the list with an impressive 13.10% return. This shows the strong performance of tech stocks over the past three decades. The S&P 500 Index Fund, representing a broader market, comes in second at 8.20%.

Corporate bonds offer a solid 7.20% return, balancing risk and reward. Gold, often seen as a haven, yields 6.80%. US Treasury bonds provide 4.90%, while real estate returns 4.80%.

T-Bills, the safest option, give 2.20%. This lower return reflects their low-risk nature.

Stock index funds seem appealing to those seeking high returns. But they come with more ups and downs. Bonds and T-bills offer steady, lower returns with less risk.

While not in this table, the Dow Jones Industrial Average and the Russell 3000 often track closely with the S&P 500, so its returns would likely be similar.

How Much Can You Earn Through Investing?

Growth Stocks: 10-20%

Growth stocks can offer some of the highest returns when investing. These are companies expected to grow faster than average, often in exciting sectors like tech or biotech. For example, if you had put $1,000 into Amazon back in 1997, it would be worth over $1 million today. That’s a staggering return! But it’s important to remember that not every growth stock will be an Amazon. These stocks can be volatile and risky. I always make sure to do my homework before investing in any individual company.

According to my research, 90% of “Growth” ETFs do not outperform the NASDAQ 100, which makes the QQQ ETF the best growth fund to buy. It’s the world’s top-performing index.

NASDAQ 100 ETF (QQQ) – Growth Index Chart

Dividend Stocks: 3-5%

Dividend stocks are a different beast. They might not grow as fast, but they pay regular cash dividends. I like to think of them as the steady Eddies of my portfolio. A good example is Coca-Cola. If you had invested $10,000 in Coke in 1990 and reinvested all the dividends, you’d have over $100,000 now. That’s not as flashy as some growth stocks, but it’s a solid return with less stress. Plus, those dividend payments can provide a nice income stream, especially in retirement.

Vanguard International High Dividend Yield ETF (VYMI)

Trading Stocks: 0-20%

Trading stocks is a more active approach. Instead of buying and holding for years, you might buy and sell within days or weeks. It’s exciting, but it’s also riskier. My research shows that using certain indicators like the Price Rate of Change, VWAP, and Hull Moving Average can potentially double market returns, giving 10-20% annually. But I have to be careful – it’s easy to get caught up in the excitement and make costly mistakes. A wild example is Tesla – a $10,000 investment in March 2020 would have grown to $90,000 by December 2020.

But timing the market like that is incredibly difficult and not a reliable strategy.

Tesla Chart: When Growth Stocks Go Bad

S&P 500 ETF: 8%

The S&P 500 is another popular index fund, tracking 500 of the largest US companies. It’s returned about 8% annually over the past 30 years, again before fees and taxes. To put that in perspective, if you had invested $10,000 in an S&P 500 index fund in 2010, it would have grown to over $33,000 by 2021. That’s more than tripling your money in about a decade!

S&P 500 ETF (SPY) Chart

Corporate Bonds: 7.20%

Corporate bonds allow me to lend money to companies and earn interest. They’re generally less risky than stocks but offer lower returns. From 1993 to 2023, corporate bonds returned an average of 7.20% per year before fees and taxes. That’s not as high as stocks, but it’s still a decent return, especially considering the lower risk.

PIMCO Active Bond ETF (BOND) Chart

Gold: 6.80%

Gold is often seen as a haven during uncertain times. From 1993 to 2023, gold returned an average of 6.80% annually before fees and taxes. I find it’s a good way to diversify my portfolio and hedge against inflation. But I’m careful about how I invest in gold – buying physical gold can be costly due to storage needs. Instead, I might consider gold ETFs or mutual funds.

SPDR Gold Trust Chart (GLD)

Real Estate: 4.8-9.5%

Real estate can be a great investment, but it’s not always easy. From 1993 to 2023, real estate investments returned between 4.8% and 9.5% on average per year. This can come from both property appreciation and rental income. But I have to remember that real estate can be illiquid – I can’t sell a house as quickly as I can sell a stock. It also requires more hands-on management than other investments.

Vanguard Real Estate ETF (VNQ)

US T. Bond: 4.90%

US Treasury bonds are considered one of the safest investments around. From 1993 to 2023, they returned an average of 4.90% per year before fees and taxes. That’s not a huge return, but the security can be worth it, especially as I get closer to retirement and want to reduce risk in my portfolio.

3-month T.Bill: 2.20%

Three-month Treasury bills are short-term investments backed by the US government. From 1993 to 2023, they returned an average of 2.20% per year. That’s not much, but they’re incredibly safe and liquid. I might use these as part of my emergency fund or to park cash I’ll need in the near future.

Factors Influencing Your Return

Diversification

Spreading investments across different stocks and asset classes is key to managing risk and boosting potential returns. By not putting all my eggs in one basket, I protect myself from major losses if one company or sector underperforms. I like to mix stocks, bonds, and other assets based on my risk tolerance and goals. This approach has helped me weather market ups and downs more smoothly.

Risk Management

I know that investing in stocks comes with risks, but there are ways to handle them. I keep a long-term view and try not to panic when markets dip.

It’s important to understand that stock prices can be affected by many things, like:

• Company performance
• Industry trends
• Economic conditions
• Government policies
• Global events

I pay attention to these factors, but I don’t let short-term swings dictate my strategy.

Instead, I focus on:

1. Setting clear investment goals
2. Sticking to my plan
3. Regularly reviewing and adjusting my portfolio

I also consider dollar-cost averaging, which means investing a fixed amount at regular intervals. This can help me buy more shares when prices are low and fewer when they’re high.

Remember, there’s no guarantee in the stock market. But by staying informed, diversifying, and managing risk, I can work towards my financial goals. The key is to invest wisely, based on solid research and my personal risk comfort level.

Top Investor Earnings

Warren Buffett: Annual Return of 24.7%

Warren Buffett, the 5th richest person on Earth, has made his fortune through smart stock picks. His net worth stands at a whopping $118 billion. Buffett’s investing skills are truly remarkable. From 1965 to 2023, he grew his money by 24.7% each year on average. This means if you gave him $1 in 1965, it would have turned into $104.9 by 2017. That’s way better than the S&P 500’s 9.8% yearly return or gold’s 6.8%.

Buffett’s secret? He follows value investing.

Buffetts Company – Berkshire Hathaway Chart

This means he looks for:

• Companies with strong assets
• Businesses that grow steadily
• Stocks that are cheaper than they should be

He also likes to buy and hold. Instead of trying to time the market, he sticks with his picks for the long haul. This approach has helped him build long-term wealth over many years.

George Soros: Achieving an Annual Compound Return of 28.6%

George Soros is another investing superstar I admire. From 1969 to 2023, he grew his money by 28.6% on average each year. That means $1 invested with Soros in 1969 would have grown to $735 by 2023. Pretty amazing, right?

Soros does things a bit differently than Buffett.

He:

• Makes long-term investments
• Trades complex financial tools like derivatives
• Bets on currency changes

One of Soros’s most famous wins was in 1992. He bet against the British pound and made a cool billion dollars in just one day!

But Soros isn’t just about making money.

He gives away lots of cash to causes he cares about, like:

• Human rights
• Education
• Health care
• The environment

He’s also big on politics and supports many campaigns around the world.

These top investors show that with skill and patience, it’s possible to grow your wealth through investing. But remember, even the best can’t win all the time. There are no sure things in the stock market, and big wins don’t always last.

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