This calculator illustrates the cost of underperformance – or falling short of your target rate of return.

Specify the holding period for your investments and the value of your portfolio today. Choose a reasonable target or benchmark rate of return, and try different estimates for the ‘performance gap’ – the amount (in percentage) that actual returns fall short of the benchmark. The results will show that even a 1% performance gap over a long holding period will have a significant, negative impact on the future value of your investments.


Investment Holding Period in Years    
Current Value of Portfolio $  
Benchmark Rate of Return %
Performance Gap %  


With Benchmark Return With Benchmark Return less Performance Gap
Future Value of Portfolio at the End of the Holding Period




Assumptions

  • A lower average return will mean less income tax - but for this calculation income tax is ignored.
  • The difference in growth is based on the original amount of capital – no additional savings are assumed.
  • It is assumed there are no withdrawals during the scenario.