Thornburg Investment Management’s real real return index illustrates that a $100 hypothetical investment utilizing the performance of the S&P 500 Index for the stated time period shown above would have grown to $3,871 after 30 years – a very impressive nominal return!

However, that figure masks the impact of expenses, taxes on dividends and capital gains, and the insidious erosion of purchasing power caused by inflation. Once these influences are factored in, the real real value of that $3,871 is just $560.