Nominal Return
The amount of money generated by an investment before factoring in expenses such as taxes, investment fees, and inflation.
Frequently Asked Questions
Why does nominal return matter if it ignores inflation?
It provides a straightforward baseline for comparing the gross performance of different investments.
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Inflation Rate
The percentage at which the price of goods and services is rising, which directly reduces your purchasing power.
Purchasing Power
The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.