Real Returns

The website www.finalternatives.com has an interesting article by Charles Gradante, Managing Principal of the Hennessee Group.  He writes that most people evaluate investments based on nominal returns and not real returns.  Real returns are equal to nominal returns less inflation.  He refers to two Standard & Poor's charts.  The first one displayed the annualized performance of the equity markets in 10 year period beginning with 1970.  The 70s had a negative real return of 1.48% as inflation was higher than the return of the equity markets.  The 1980s and 1990s returns above inflation were 12.48% and 15.29%.  The last decade, 2000s, lost 3.48% annually.  The loss in the 2000s was hit hard in 2008 with a negative real return of 37.10%.