What Could Your Investments
Actually Grow To?

Why Every Investment Calculator Is Lying to You

Open any investment calculator and you'll be asked to enter an "expected annual return" — usually suggested as 7%, 8%, or 10%. The calculator then shows you a smooth upward line growing your money steadily for 20 or 30 years. It looks reassuring. It's also deeply misleading.

Real markets don't deliver 8% every year. They deliver a sequence — some years up 30%, some down 40%, most somewhere in between. And the order of those years matters enormously for how much money you actually end up with. Two investors with the same plan and the same "average return" can end up with vastly different outcomes depending purely on which years they lived through.

The Accumulation Advantage: Pound-Cost Averaging

During the accumulation phase — the years when you're still building wealth rather than drawing it down — bad markets aren't necessarily your enemy. When markets fall, your monthly contributions buy more shares at lower prices. Those shares then participate fully in the recovery. This is pound-cost averaging, and it's one of the most powerful features of regular investing.

This is why the worst outcomes for regular monthly investors are typically much less severe than for equivalent lump-sum investors who happened to invest at a peak. You'll see this clearly in the simulator: compare how the absolute worst window performs for regular contributions versus how much worse it would be as a pure lump sum. The results are striking.

How to Read the Simulator Results

The chart shows every historical investment window as a faint grey line — the full picture of every documented outcome. Overlaid are seven reference lines:

• Absolute best (bright green, solid) — the single best start date in the dataset. The luckiest window history has on record.
• Absolute worst (bright red, solid) — the single worst start date. Even this still typically beats keeping cash.
• Typical outcome (white) — the median. Half of all investors did better, half did worse.
• Good era (orange, dashed) — better than 75% of all historical starts.
• Tough era (purple, dashed) — worse than 75% of all historical starts.
• Best 10% (teal, dashed) — the 90th percentile. Exceptional but real.
• Worst 10% (amber, dashed) — the 10th percentile. Difficult but survivable.

You can also overlay the influencer line — a smooth fixed-return projection at any annual rate — to directly compare what the "guaranteed 8%" promise looks like against the messy reality of actual markets.

How to Use These Results Practically

The best historical outcomes in this dataset tend to cluster around investments that began just before or at the start of a major bull market — the early 1980s, for example, which preceded one of the longest sustained rallies in S&P 500 history. The worst outcomes typically involve starting at a market peak and immediately experiencing a prolonged downturn, such as the late 1960s entry into the stagflation era, or investing heavily in the late 1990s just before the dot-com crash.

What the simulator consistently shows is that time in the market matters far more than timing the market. As the duration increases, the range between best and worst outcomes narrows dramatically. Over 30 years, virtually every historical period produced a positive real return. Over 5 years, the variance is enormous.

Monthly contributions matter more than lump sums

The data consistently shows that regular monthly contributions reduce timing risk significantly compared to large single investments. If you have a lump sum to invest, consider whether deploying it gradually suits your risk tolerance — while being aware that mathematically, markets go up more often than they go down, so gradual deployment is insurance rather than optimisation.

Time is your most powerful tool

Notice how the spread of outcomes narrows as duration increases. Short investing periods produce wildly variable results. Over 20 or 30 years, the range narrows considerably and the vast majority of historical periods produced positive real returns. The single most effective thing you can do for your investment outcome is to start early and stay invested.

A Note on This Data

This simulator uses the S&P 500 total return index (dividends reinvested) from March 1957. Most UK ISA and SIPP investors use global index funds rather than the S&P 500 alone — your actual returns may differ, particularly due to currency effects and the relative performance of non-US markets. However, the S&P 500 provides the richest available long-run dataset for this kind of analysis, and the structural lessons about timing risk apply universally.

The simulation does not account for platform fees, fund ongoing charges, or tax. A realistic global index tracker in an ISA might charge 0.1–0.5% per year in total costs. Incorporating this would reduce outcomes by roughly 0.3–0.7% annually — meaningful over long horizons.