What is a historical return?
A historical return shows how well a security or index has previously performed. This data is used by analysts and investors to try and predict future trends.
Where have you heard about historical returns?
The media often use historical returns to calculate how much stock would be worth today if you had invested years ago.
For example, $1,000 invested in Warren Buffett’s Berkshire Hathaway in 1964 would be worth about $11.6 million dollars today.
What you need to know about historical returns.
The data from historical returns shows the ups and downs of a market or particular security, so analysts can see how they coped with different variables and each stage of the business cycle.
While this information can be useful, it doesn’t mean that markets and securities will behave in exactly the same way in the future it is merely a guide of past performance that can help provide a basic idea of potential future returns.
Historical stock market returns calculators show how much an investor could have made on a specific security if they had invested it during a certain period of time.