If this bleak projection were to come to fruition, a 60/40 * portfolio would shrink $ 100 into $ 77
on a real basis over the next seven years.
One of the core premises in finance is to create
wealth on a real basis by maintaining some kind of discount rate which takes into account the time value of money and also the level of risk associated with the investment.
Here are the same
results on a real basis (adjusted for inflation), which shows that 40 % of the 66 outcomes yielded positive real annualized stock returns and about 25 % had real returns above 3 %.
The evaluation of its benefits confirms the improvements of the proposed model, both mathematically and
on a real basis.
In CBDs, incomes
on a real basis are up by 8.0 percent, compared with suburban incomes on a real basis that are down by 8.0 percent.