Just passing this paper along from the comments section. It’s a very good read on real, real returns on various asset classes. This is crucial to understanding how different assets generate total returns and how they can be viewed in totality:
“Investors often focus on nominal return — or the return they see quoted in the paper or on a financial news site — on a given investment. Unfortunately, there are several factors that often stand between a nominal-return figure and the building of real wealth. Sophisticated investors frequently refer to the real return, which is a nominal return adjusted to take inflation into account. At Thornburg, we take that analysis a few steps further and adjust stated performance numbers for additional factors — taxes and investment expenses among them. We believe that investors should be attentive to this return figure, the number that’s left after accounting for inflation, taxes, and investment expenses.”
Read it here.