<title>Learn how Money estimates historical performance</title>
<category>lifeplan</category>
<klink type="cncpt">Tell me how Money estimates historical performance</klink>
</index>
<content>
<p>If you choose, Money will estimate a rate of return to be used in your lifetime plan based on the historical market performance of investments similar to yours.</p>
<p>To calculate that rate of return, Money doesn't look at the direct return of the specific investments you own, or at how they've performed since you've owned them. Instead, Money looks at the mix of stocks, bonds, and cash you have in your accounts and calculates how portfolios with a similar mix have done on average over the past several decades.</p>
<p>While this method isn't perfect, it does mean that your long-term estimated returns aren't distorted by short-term market trends. Using asset mix and typical historical returns is a standard method financial planners use to analyze investing portfolios.</p>
