Vanguard 10 yr Expected Returns

[Deleted]

From BCAWOCS - awealthofcommonsense.com/2021/12/expected-returns-over-the-next-decade/  - edit - these are nominal returns. 

[chang]

Cash returning 1.2-2.2%? Where?

[Deleted]

10 year lookout. 

[chang]

Dec 14, 2021 12:56:59 GMT @slooow said:

10 year lookout. 

Oops, of course.

Rather interesting prognostications. Affirms my decision to ignore small caps in my ret. portfolio, and not to ignore foreign.

What stands out, of course, is the US growth numbers.

[Chahta]

Dec 14, 2021 13:00:19 GMT chang said:

Dec 14, 2021 12:56:59 GMT @slooow said:

10 year lookout. 

Oops, of course.

Rather interesting prognostications. Affirms my decision to ignore small caps in my ret. portfolio, and not to ignore foreign.

What stands out, of course, is the US growth numbers.

I agree, but it is a prediction...

US growth looks scary but SC beats growth. Interesting.

[Deleted]

Fine point - but I believe this is a forecast and not a prediction.

[Chahta]

Not sure who this fellow is doing the pre-forecast. But another fellow says "the market will tell us where to be". Is a "projection" a forecast or prediction? "An estimate or forecast of a future situation".

[yogibearbull]

Remember the total return components for stocks,

%TR = %Dividend_yield + %Earnings_growth + %Change_in_P/E.

Formula is exact for past data. But when used for projections, results depend on the inputs. In most segments/sectors, earnings growth may be there but P/Es are also elevated and may adjust.

[uncleharley]

Fwiw, A prediction is usually based on a belief. A forecast is usually based on known historical patterns and/or likely mixes of those patterns. A projection is usually historical data projected out to whatever point in the future that one wants to use.

[Deleted]

From an article on the differences - fwiw - We predict when we say in advance, foretell, or prophesy what is likely to happen in the future. We project when we calculate the numerical value associated with a future event. We forecast, a special kind of prediction, on data of past happenings to generate or cast data for future by relying happenings. Generally, one predicts (yes, no) a war, an earthquake or the outcome of a chess match, projects the value of the GNP or of unemployment, and forecasts the weather and, more scientifically, the economic trends.

Pretty much what UH said.

[steadyeddy]

As the graph says at the bottom, these are "probabilistic return numbers based on current market conditions."

We all know the market conditions WILL change in a 10yr period.. so take these with a BLOCK of SALT.

[Chahta]

I get it but is this forecast more accurate than someone predicting? I saw no real analysis here but assume Vanguard has it somewhere. Author said: "In short, markets are hard to predict.

While this is always the case, you still have to set expectations for the future based on some combination of the present situation, historical market data and some guesstimates about the future."

I am not picking on this but calling it a forecast may be no more accurate than a calling it a prediction but we shall see. Is this per year for the next 10 or total for 10 years?

[Deleted]

More info on projection -https://advisors.vanguard.com/insights/article/marketperspectivesdecember2021

Definitely take it with a grain of salt, but nice to have some starting point for expected returns and as Ben C says, Vanguard doesn't have a history of pessimistic returns.

[uncleharley]

Dec 14, 2021 16:09:33 GMT Chahta said:

I get it but is this forecast more accurate than someone predicting? I saw no real analysis here but assume Vanguard has it somewhere. Author said: "In short, markets are hard to predict.

While this is always the case, you still have to set expectations for the future based on some combination of the present situation, historical market data and some guesstimates about the future."

I am not picking on this but calling it a forecast may be no more accurate than a calling it a prediction but we shall see. Is this per year for the next 10 or total for 10 years?

It's the method that makes the difference.  All 3 could be accurate or wrong on hindsight however one should have a better batting average if that person is using some data and historical patterns to make their prediction/forecast rather than a guess or an act of faith.

[rhythmmethod]

Dec 14, 2021 13:00:19 GMT chang said:

Dec 14, 2021 12:56:59 GMT @slooow said:

10 year lookout. 

Oops, of course.

Rather interesting prognostications. Affirms my decision to ignore small caps in my ret. portfolio, and not to ignore foreign.

What stands out, of course, is the US growth numbers.

Within the holdings I already have, this makes SCHY and VGWAX seem more compelling to me.

[Capital]

It's going to take me about 3700 days to have an opinion on this. Stay tuned!!! 

[anitya]

What is impressive to me is US growth equities are predicted to be worse than all bond categories and US stocks in general are not much better than high yield bonds. This is sobering if Vanguard are not known for pessimism, which may be true from my recollection of their predictions in Dec 2020 discussed in this forum.

It would be great to see and compare against Vanguard’s prediction from Dec 2020.

[steelpony10]

           Well growth has been on a roll since the 80’s. I’ll stick with this hot hand especially U. S. tech until the end. That’s a projection based on real past facts.

            So I’ll project DOW 75k when I push my last sell button. I went from Dow 750 and would like to end at Dow 75k because I like more assured outcomes.

[Fearchar]

Here is last years report 
pressroom.vanguard.com/nonindexed/Vanguard-economic-and-market-outlook-report-2021-120920.pdf

Many similarities, which makes sense as it's a long term outlook.



Here is this years report for 2022:
www.vanguardmexico.com/content/dam/intl/americas/documents/mexico/en/2021/12/mx-sa-1955302-vanguard-economic-and-market-outlook-for-2022-striking-a-better-balance.pdf