Vanguard's Portfolio Allocations page (1926-2019) shows 9.21% Average annual return for 70% Equity and 30% Fixed income.

Does this mean 9.21% compounded annually?

If at age full retirement age (66-1/3) I begin taking social security and investing in 70% equity & 30% fixed income funds, how much will I accumulate by age 70?

I want to use (ie. find or write) a program to forecast how much principal I'll have at 70.

For accuracy, should I compound annually or continually or daily?

  • 2
    Although the average over 93 years has been 9.21%, it is highly unlikely that the 3 1/2 years you are trying to predict will perform the same. It will almost certainly be higher or lower. You can find 3 1/2 year periods of history when the average was +20% and other 3 1/2 year periods where it was -20%.
    – chili555
    Nov 20, 2022 at 21:31

2 Answers 2


You should use annual compounding since that's how it was measured, but it shouldn't make a significant difference. There is enough variance in historical returns that the margin of error for expected future returns will be much higher than any difference due to compounding.



If portfolio returns 9,21% annually, then after 4 years the return would be +42,25%

  • Thanks. Out of curiosity, how did you get 42,25% ?
    – Doug Null
    Nov 19, 2022 at 16:19
  • 1.0921 cubed, minus the starting 1.
    – keshlam
    Nov 19, 2022 at 18:05
  • Cubed means raised to the third power and would not result in 42.25%, you took 1.0921^4
    – Hart CO
    Nov 19, 2022 at 18:29
  • Correct; typo in my comment. Unfortunately SE doesn't allow editing comments after a few minutes. I could delete it and repost, but that would leave @HartCO's comment floating. Hopefully it's good enough to briefly illustrate compounding interest.
    – keshlam
    Nov 23, 2022 at 21:56

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .