What Is a Good ROI? Benchmarks by Asset Class

So you put $10,000 into a fund six months ago and it’s up 8%. Nice, right? But then your coworker mentions her portfolio gained 14% over the same period, and suddenly you’re second-guessing everything. Here’s the thing most people get wrong about ROI: a percentage without context is completely meaningless.

A 5% return on a Treasury bond? That’s solid. A 5% return on a high-risk tech stock? Terrible. The same number tells two totally different stories depending on the asset class, the time horizon, and how much risk you stomached to get there. I’ve seen people celebrate returns that were actually underperforming, and I’ve seen others panic over perfectly normal results.

I’m going to walk you through the actual historical benchmarks for every major asset class — real numbers from real data — so you can look at your portfolio and know exactly where you stand. And if you want to crunch your own numbers right now, our Investment ROI Calculator will show you how your investments stack up.

ROI Basics (Without the Textbook Fluff)

ROI is just profit divided by cost, expressed as a percentage. You bought something for $10,000, it’s now worth $13,000, your ROI is 30%. Dead simple.

But here’s what nobody tells you: that 30% is almost useless information by itself. Did it take one year to earn that? Then 30% is incredible — you crushed the market. Did it take ten years? That’s roughly 2.7% per year, which actually trails inflation in many years. You didn’t grow your wealth; you shrank it in real terms.

This is why annualized ROI matters way more than total ROI. Always annualize when you’re comparing investments. A stock that returned 50% over five years sounds better than one that returned 12% in one year, but the single-year investment actually performed better on an annual basis.

There’s also the difference between nominal and real returns. Your portfolio says +10% for the year — great. But inflation ran at 3.2%, so your actual purchasing power only grew by about 6.8%. According to the Fed, average inflation has run around 3.2% over the last couple decades. Always subtract inflation when you’re evaluating long-term performance, or you’re lying to yourself.

Real ROI Benchmarks by Asset Class

Alright, here’s the meat of it. These are the numbers you should be comparing your returns against, depending on what you’re invested in.

U.S. Stocks (S&P 500)

The S&P 500 has averaged about 10.3% per year since 1926, according to NYU Stern data. After inflation, that drops to roughly 7%. If you’d dumped $10,000 into an S&P 500 index fund in 1990 and just left it alone, you’d be sitting on approximately $210,000 today with dividends reinvested. Do nothing, get rich slowly — that’s basically the pitch for index investing, and honestly, it works.

If your stock portfolio is consistently beating 7% annually after inflation, you’re doing better than most professional fund managers. Seriously — the SPIVA Scorecard shows that over 90% of actively managed funds underperform the S&P 500 over 15-year stretches. So if you’re matching the index with a Vanguard or Fidelity fund charging 0.03% in fees, you’re already ahead of the game.

Real Estate

Pure home appreciation in the U.S. has averaged 3.7% to 4.2% per year, per the Federal Housing Finance Agency. That’s… fine. Not exciting. But when you add rental income on top, well-located investment properties can pull in 8% to 12% total annual returns.

For rental properties, experienced investors target 8% to 12% cash-on-cash return. Flippers aim for 15% to 25% per project. But don’t forget the costs that eat into real estate returns and don’t exist with stocks — property taxes, maintenance (roofs aren’t cheap), insurance, vacancy months where you earn nothing, and the occasional tenant who trashes the place. A friend of mine hit a “12% return” on paper last year but spent $8,000 on plumbing repairs and ended up closer to 6%.

Bonds

U.S. Treasuries have historically returned 5.0% to 5.5% per year, with corporate bonds slightly better at 5.5% to 6.5%. After inflation, you’re looking at real returns of 1.5% to 3.0%. Not glamorous, but bonds aren’t supposed to be glamorous. They’re the part of your portfolio that keeps you from losing sleep during a stock market crash.

A good ROI for government bonds is anything above 4%. For investment-grade corporates, above 5.5%. High-yield (junk) bonds can pay 7% to 10%, but there’s a reason they’re called junk — the default risk is real.

Savings Accounts and CDs

High-yield savings accounts at places like Marcus by Goldman Sachs, Ally, or Wealthsimple are paying 4.0% to 5.0% APY right now, which is historically unusual. The long-term average for savings accounts is a depressing 1% to 2%. CDs offer a bit more for locking your money up.

Honestly, a “good” return on cash savings is anything that keeps pace with inflation (around 3.0% to 3.5% currently). If your savings account pays less than that, your money is quietly losing value every single day. According to the Fed, the average savings rate is 4.6%, so at least the current HYSA rates are actually working for savers right now.

Cryptocurrency

Bitcoin has returned over 150% annualized since 2011. Sounds insane, and it is — because in 2022 alone it dropped 65%. Ethereum has had similar wild swings. These aren’t returns in any traditional sense; they’re more like lottery ticket outcomes that happen to average out to big numbers over long periods.

There’s no real “good ROI” benchmark for crypto because the asset class is barely 15 years old. Most advisors at Vanguard, Fidelity, and Schwab suggest capping crypto at 5% of your total portfolio. Treat it as speculative, not foundational.

Risk and Returns: The Part People Skip

Look, there’s a fundamental rule in investing that never goes away: higher potential returns come with higher risk. Always. No exceptions.

Your savings account at Ally paying 4.5%? Essentially risk-free up to $250,000 because of FDIC insurance. The S&P 500 averaging 10%? It dropped 34% in a single month during March 2020. Crypto promising triple digits? It can lose 80% of its value before you finish your morning coffee.

The Sharpe Ratio measures how much extra return you’re getting per unit of risk. The S&P 500 historically scores about 0.4 to 0.5. Anything above 1.0 is considered excellent. If someone at a party tells you they made 50% last year, the right question isn’t “wow, how?” — it’s “what was your Sharpe Ratio?” A 50% return from putting everything into a single meme stock isn’t skill. That’s gambling. A 12% return from a diversified portfolio with minimal drawdowns? That’s actually impressive.

What a Smart Portfolio Actually Looks Like

If you’re in your 30s or 40s and want consistent, good returns without losing sleep, here’s a portfolio allocation that’s worked historically:

• 60% U.S. and International Stocks: Targeting 8% to 10% annually. Low-cost index funds from Vanguard (VTI, VXUS) or Fidelity (FZROX) with fees under 0.10%. This is your growth engine.
• 20% Bonds: Targeting 4% to 6%. A mix of government and investment-grade corporate bonds. This is your crash cushion.
• 10% Real Estate: Targeting 8% to 12%. Either rental property or REITs if you don’t want to deal with tenants and toilets.
• 5% Cash/Savings: Targeting 4% to 5% in a high-yield account. Emergency fund plus opportunity money for buying when markets dip.
• 5% Alternative Investments: Crypto, commodities, whatever you find interesting. This is your “fun money” bucket — high risk, potentially high reward.

A portfolio like this has historically returned 7% to 9% per year after inflation. That means your money doubles roughly every 8 to 10 years. Starting with $50,000 at 30 and adding $500 per month, you’d have over $1.2 million by 60. That’s not fantasy math — that’s how compounding actually works.

Want to see what your specific numbers would look like? Plug them into our Investment ROI Calculator and model different scenarios.

Mistakes That Are Quietly Killing Your Returns

I’ve seen people make these mistakes over and over, and they add up to staggering amounts of lost money:

1. Paying fees you don’t notice: A mutual fund charging 1.0% versus a Fidelity index fund charging 0.03% — tiny difference, right? Over 30 years on $100,000, that “tiny” gap costs you over $150,000 in lost growth. Check your expense ratios today.
2. Chasing whatever did well last year: That fund up 40% last year? There’s a strong statistical chance it’ll underperform next year. Mean reversion is real. The SPIVA Scorecard consistently shows 90%+ of active funds losing to the index over time.
3. Forgetting about taxes: A 10% return in a taxable brokerage account becomes about 7% after capital gains taxes. Max out your 401(k), IRA, and Roth IRA before putting money in taxable accounts. The tax savings compound just like returns do.
4. Panic selling during crashes: The S&P 500 has recovered from every single crash in history. Every one. People who sold during the COVID crash in March 2020 locked in 30%+ losses. People who held? Fully recovered within five months and then some.
5. Comparing your bonds to someone else’s stocks: Apples to oranges. Always benchmark within the same asset class and risk level, or the comparison means nothing.

If you want to understand how building up investment capital faster changes everything, check out our guide on how to save $10,000 in 12 months.

So What Should YOU Aim For?

Here’s your cheat sheet, based on everything above:

• Conservative (low risk tolerance): 4% to 6% per year. Heavy on bonds, savings accounts, CDs. You sleep great at night.
• Moderate (balanced): 6% to 8% after inflation. Mix of stocks and bonds. The sweet spot for most people.
• Aggressive (higher risk tolerance): 8% to 12% per year. Heavy on stocks and alternatives. Bigger swings, bigger long-term gains.

But here’s what matters more than any of those numbers: time in the market. Not timing the market — time IN it. Someone earning 7% for 40 years turns $10,000 into $149,745. At 10%, that same $10,000 becomes $452,593. But even at 7%, compounding does the heavy lifting. The hardest part isn’t picking the right investment — it’s being patient enough to let it work.

Know Your Benchmarks, Grow Your Money

Here’s the bottom line: stocks average 10%, real estate 8% to 12% with rental income, bonds 5% to 6%, and savings accounts 4% to 5% right now. Those are your benchmarks. Anything above them for your asset class means you’re doing well. Anything below means something needs to change.

The next step takes about two minutes: run your actual numbers through our Investment ROI Calculator and see exactly where your investments land compared to these benchmarks. You might be doing better than you think — or you might find some easy wins you’ve been leaving on the table.