10-Year Individual Investor Rate of Return

The September issue of Registered Rep contained an in-depth analysis on how devastating the last 10 years have been for the individual investor.  Registered Rep’s research concludes that the average return over the last decade for individual investors was 0%.

“…We estimate that long-term real (adjusted for inflation), actual (after taxes, fees and market timing) returns for the average investor, to be around 0 percent.”

To put that in perspective, since 1871 the average 10-year rate of return for the S&P 500 index is 7.4% (inflation adjusted).  As institutional investors continue to leave the film industry and the foreign pre sales market continues to decline, the film industry’s business model is going to vastly change.  Today, filmmakers are scrambling for financing, relying more on soft money from tax credits and individual film investors than ever before.  Yet even with the market’s 50% retracement from the bottom, the film industry derives little benefit.  Although financing from soft money mitigates downside, in a market that champions liquidity, film is perceived as a risky asset allocation.