Edward Sachs CPA/ABV CFF

As we all know, after determining the equitable distribution we must calculate how much income can be expected to be earned from investible assets.  What is a reasonable rate of return to calculate on assets being distributed?

A recent study published by Crandall, Pierce & Company, an investment research firm in Illinois, shows that with a mix of 40% stocks, 50% bonds and 10% in cash the one year returns for the year ending September 30, 2017 averaged 9.1%.  Three-year returns ending on the same date for the same mix averaged 6.1%, five-year returns averaged 7.5% and ten-year returns averaged 5.0%.  Keep in mind that the ten-year average includes the 2008 market crash.

The study, utilizes information from Standard & Poor’s 500 Stock Index, Intermediate Treasury Bonds and 90-day Treasury Bills.  The ten-year study shows rates of return ranging from 2.9% for 90% bonds and no stock to 6.7% for 90% stocks and no bonds.