FWMG Blog

Expected Returns

One of the core inputs required in the financial planning process is the assumption of what the future return of the security (portfolio) will be. Obviously higher returns are preferable because they translate into greater spending power and/or reaching your goals sooner. Yet higher returns come with a caveat; higher risk. There is a very strong correlation between risk and return. So the higher the desired return, the greater the risk of losing money over a period of time.