Fixed Income vs Stocks (Long Term)
Compare growth of $X in fixed income (constant rate) vs stocks (vol simulated via stdev). N years.
Fixed income vs equities: the risk/return trade-off
In Brazil's 2026 environment, with the Selic rate at 15%, a CDB paying 100% of CDI yields roughly 12.7% net per year after IR. The historical Ibovespa nominal return is around 6–8% in real terms, with peaks of 15–20% in bull markets — but with possible drawdowns of −30%. For horizons under 3 years, fixed income is generally preferable (risk of unrecovered drawdown). Above 10 years, equities statistically outperform. Classic asset allocation rules: 60/40 stocks/bonds and the "100 minus age" rule popularized by John Bogle (the percentage in equities equals 100 minus your age).
Applications
Retirement planning, the FIRE movement (Financial Independence, Retire Early), suitability profiling under ANBIMA, and portfolio construction at robo-advisors (Magnetis, Warren, Vitreo) and brokerages.
FAQ
Is fixed income always safer? Less volatile in nominal terms, yes — but it carries inflation risk (negative real returns) and, for private credit, issuer default risk.
How much in equities for a 30-year-old? Bogle's rule suggests around 70% in stocks; modern variants raise this to 80–90% given longer life expectancy.
How do I rebalance? Annually (or when a class deviates more than 5–10 percentage points from target), selling what appreciated to buy what fell — sells high and buys low automatically.
Related Tools
Stock Market Long-Term Yield Calculator
Simulate stock market long-term yield: initial + monthly contribution × N years × annual rate. Compares to fixed income.
4-Way Investment Comparison
Compare 4 investments side-by-side: savings, CDB 100% CDI, LCI 95% CDI, Treasury Prefixed 11%. For a given value and term.
Bond Dirty Price
Computes the dirty price of a bond: the clean price plus the interest accrued since the last coupon. The clean price is what shows up in quotes, but what actually changes hands at settlement is the dirty price, because the buyer has to reimburse the seller for the interest already run up. The tool works out the accrued interest on a linear basis and adds it to the clean price, returning both parts. Enter the clean price, the face value, the annual coupon rate, the coupon frequency, the days since the last coupon and the days in the period.
Tesouro IPCA Plus Yield Calculator
Estimates gross yield of a Brazilian Tesouro IPCA bond combining annual real coupon with expected IPCA inflation over the given years.
Breakeven Inflation Rate
Computes the breakeven inflation embedded in the gap between a nominal bond and an inflation-linked bond, using the exact Fisher equation: (1 + nominal)/(1 + real) − 1. It's the inflation rate that would equalize the return of the two instruments — above it, the linker wins; below it, the nominal one. The exact version avoids the error of the simple approximation (nominal − real), which overstates inflation by a few basis points. Enter the nominal yield and the real yield.
Futures/Forward Convexity Adjustment
Computes the convexity adjustment between a futures rate and the equivalent forward rate, using the Ho-Lee approximation: forward = futures − ½·σ²·T1·T2. Interest rate futures and forwards don't carry the same rate because of the daily marking to market of futures, and the convexity adjustment corrects that difference, always pushing the forward rate below the futures rate. Enter the absolute short-rate volatility, the time to the futures maturity and the end of the rate period.
The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.