How to adjust for inflation?

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1

So say on the 1st Jan 2018 I invested £1000 and got no dividends and on 1st Jan 2020 it was now at £1050

So that is an ROI of 5%

What is that when adjusted for inflation?

2

Depends on your rate of inflation. Assuming one of the pre-defined ones e.g. in the UK the most obvious ones are CPI and RPI. For the example you quoted, the CPI across that period would be about 3.6%, whilst RPI would be 5.3%. So, your 5% return would be a real return of 1.4% or -0.3%, respectively.

3

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