Nominal Return
The gross return before inflation. The number your broker statement shows — but not the one that determines your purchasing power.
Real Return
Your return after subtracting inflation. If your portfolio gained 7% while inflation was 3%, the real return is roughly 4% — that is how much wealthier you actually became.
Category
Market Basics
Hebrew
תשואה ריאלית
English
Real Return
Worked example: Example: ₪100,000 growing to ₪107,000 in a year = 7% nominal. With 3% inflation, the real return is only ~3.9%.
Tools that demonstrate this term
Related terms
Inflation
A general rise in prices that erodes the purchasing power of idle money. In Israel, the CBS (Central Bureau of Statistics) measures it via the Consumer Price Index.
CAGR (Compound Annual Growth Rate)
The smoothed annualized return. If ₪100k becomes ₪200k in 6 years, the CAGR is about 12.2%.
All terms in this category
Nominal ReturnInflationConsumer Price Index (CPI)Compound InterestCAGR (Compound Annual Growth Rate)VolatilityDiversificationRisk ToleranceAsset AllocationDollar-Cost Averaging (DCA)Liquidity
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