Net of inflation and net of taxes, that's awfully close to zero real after-tax return.
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The estimate is derived from the trend line shown in Exhibit 3.(4) Subtracting a 3.0% inflation rate would net a respectable 5.92% annual rate of real wealth increase.
This 7% is about equal to the total return you can expect on stocks, net of inflation.
The first is that U.S. growth has averaged something like 3% (net of inflation) per year since 1980.
That means returns, net of inflation, could average out to perhaps only 4%.
From the end of World War II to 2000, the U.S. averaged close to 3.5% annual growth net of inflation.
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This is the kind of subpar growth (net of inflation) we had in the early 1990s and much of the 1970s.
After-tax income, net of inflation, has barely been growing over the past five years and is likely to decline this year.
Economic growth has averaged about 2%, net of inflation.
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For the first time ever in the history of the stock market prices are at all time highs and at the same time the U.S. economy is simply not growing net of inflation.
But that 2% looks a lot higher when you realize it can gobble up a significant portion of a fund's net return after inflation.
Meanwhile, since the market does not know by how much the government will allow Petrobras to raise gasoline prices, it is not yet possible to calculate the net impact on inflation.
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Perhaps the best way to determine China's impact on world inflation is to gauge whether its net impact is to increase aggregate global demand or supply.
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To get a read on whether these measures have made any dent in the real factors driving inflation in China, I'll be looking at net new bank lending and the money supply figures for December and the first couple of months this year.
The net net here is that we think the prospects for monetary inflation in the Eurozone are suspect indeed.
He bought zero coupon bonds in 2004 and 2005, when others thought inflation would crush them, and returned 11% and 12%, net of fees, versus the Lehman Aggregate Index's 4% and 2%.
The model works on a sliding scale, assuming that poorer Americans need to increase their net worth while the richest merely want to keep it stable, after allowing for inflation and their spending.
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