With the market going higher and higher, I guess most would agree that the expected returns are lower and lower.
What is your best guess about:a. Actual returns b. Real returns for
1. The expected returns of US and Non US(inv EM) large cap, large cap value, targeted value stocks.
2. Expected returns for a globally diversified government bond fund hedged to the US dollar with intermediate duration and nearly all developed countries.
What is the reason for your guess?
Reason for the question: to help determine the need to take risk(aka how many stocks do I need), estimating the expected returns is what I am seeking to do.
Forward looking expected returns and SD:your guess and reason
Re: Forward looking expected returns and SD:your guess and reason
Instead of asking a bunch of internet yahoos why don't you read the many, many Expected Returns white papers that are published every year around now. Robeco, BNY Mellon, iShares, JP Morgan, etc. They all explain their reasons in a lot more detail than some anonymous message board post will.
Re: Forward looking expected returns and SD:your guess and reason
Over the years I guess I’ve learned to trust the wisdom of the bogleheads....
May be there is a concensus on what’s good here on the board...
May be there is a concensus on what’s good here on the board...
Re: Forward looking expected returns and SD:your guess and reason
The wisdom here is that trying to estimate future return distributions is subject to much uncertainty even for a long term average and probably not possible as a conditional estimate taking into account present conditions.
But the question really is what use do you have in mind for the information? That might make a difference.
Re: Forward looking expected returns and SD:your guess and reason
None of it is anything I concern myself about. What will be is what will be. A diversified portfolio covers all the bases, you just need to make sure you retire with enough.
- Taylor Larimore
- Posts: 32839
- Joined: Tue Feb 27, 2007 7:09 pm
- Location: Miami FL
Guessing is Futile
Jackal:
I learned long ago that it is futile to forecast (guess) stock market returns. It is the reason I started the Boglehead Contest many years ago--to demonstrate the impossibility of correctly guessing (except by luck) future stock returns.
Use the link below to see that only 10 out of 636 Bogleheads thought the S&P 500 would reach today's current high of 2651:
2017 BOGLEHEAD CONTEST
Registration for the 2018 Boglehead Contest will be on this forum during the first 10 days in January. The winner will receive our admiration and a Boglehead book and a John Bogle book of their choice.
Best wishes.
Taylor
I learned long ago that it is futile to forecast (guess) stock market returns. It is the reason I started the Boglehead Contest many years ago--to demonstrate the impossibility of correctly guessing (except by luck) future stock returns.
Use the link below to see that only 10 out of 636 Bogleheads thought the S&P 500 would reach today's current high of 2651:
2017 BOGLEHEAD CONTEST
Registration for the 2018 Boglehead Contest will be on this forum during the first 10 days in January. The winner will receive our admiration and a Boglehead book and a John Bogle book of their choice.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: Forward looking expected returns and SD:your guess and reason
Thank you all and thank you Taylor! Agree with what you said. Guess save as much as you can and be happy and grateful for what the market gives!