D. Jewel, Assistant Manager, MA in English, California
Answered Oct 16, 2019
Well, I will strongly advise a non-professional not to consider putting too much into his (her) investment for a start because of the risks that are involved. And according to this question, it shows there could be other millions of investors who are into the same business. Investing together in the same business as those people mean they have a lot of advantages over you. However, what I consider as a reasonable return for a non-professional investor are 5-7 times whatever he has invested in the business.
I will say for a non-professional investor, the goal must not totally be on getting a good percentage of profit, but if you can get anything around what you have invested back, then you have certainly made some progress. What distinguishes you from a professional investor is the knowledge he has about what he is investing in. My belief is that your consistency on it together with some necessary information will also make you a professional investor and get you the huge returns you want.
The S&P 500 is generally seen as an accurate measure of the stock market’s performance as a whole, even though the S&P measures only about 500 of the largest and most stable companies in the New York Stock Exchange. As of 2016, the historical average annual return of the S&P 500 is about 10%.
When adjusted for inflation, the return is closer to 7%. So if you are an individual investor, not relying on brokers or others for investing advice, my opinion is that if you are receiving returns of at least 7% you should consider you are doing very well.