Every time you see a time period like 5 or 10 year return it's the average per year over that time frame, unless it's identified as a cumulative return. Usually, but not always, the bulk of the positive return was in one or two years during that time period. You could earn much higher than that if you were in for a shorter time period but the RIGHT time period. But, there is no way to know or predict that time period. With the exception of getting dividends it only matters when you buy and when you sell, what happens in between doesn't matter.
Another thing to be careful of with these mutual fund annual averages is that you would have had to be in the fund the entire year to actually realize that return since the bulk of the return comes on just several of the best days that year. I read a study one time that the average investor is far below these average returns because they get in once they hear it's doing good which is generally AFTER it's done doing good. Somewhere in this thread I posted a chart showing just how quickly your return dwindles as you miss more and more of the best days in the market in any given year. I go back to my first post in this entire thread, the key is buy low, sell high, with much more focus on buy low which psychologically is the hardest thing to do.
Go back and look how well you would have done if you had the balls to put everything you could muster in at the bottom in March 2009 when everyone was saying the stock market is doomed never to return.
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