Moondog
Term

Expected return

The return an asset or portfolio is anticipated to earn, on average, over time.

Expected return is a forward-looking estimate, not a promise. It is most useful alongside a measure of dispersion such as volatility, and expressed as a range rather than a single figure.

As a point forecast, expected return misleads; as the centre of a range, it informs. Families who plan well hold expectations loosely, focus on the spread of outcomes as much as the midpoint, and never confuse a long-run average with what any single year will deliver.

Related terms

Alternative investments Assets beyond listed equities and bonds, such as private markets, real assets and hedge funds. Asset allocation How a portfolio is divided among asset classes such as equities, bonds and alternatives. Benchmark A reference index used to judge a portfolio's performance and risk. Beta A measure of how much an asset moves with the broader market. Capital market assumptions Forward-looking estimates of return, risk and correlation for each asset class. Capital preservation An objective that prioritises protecting wealth over growing it.

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