https://www.nytimes.com/2018/08/10/busi ... onomy.html
The chances of a recession by the end of 2020 are mounting. And the prospects for the American stock market in the next decade have worsened appreciably.
Those are prognoses, not facts. But they’re not just offhand projections, either. They are the sober assessments of Vanguard, the $5 trillion asset management firm. And they suggest that the current good times may amount to a reprieve: an opportunity to make sure that you are prepared for a storm.
Vanguard, known for its caution, emphasizes that this is a general forecast.
Vanguard tracks data to predict the likelihood of a recession at certain points in the future. In recent years, the company has put the probability of a recession six months out at close to 10 percent. Now, Vanguard says the chances of one by late 2020 are between 30 and 40 percent. That’s Vanguard’s highest-ever estimate for that time frame, Mr. Davis said.
The forecast suggests opportunities, not just problems, Mr. Davis said. The 10-year outlook, for example, includes lower projected annualized returns, but still positive ones, for these two stock categories:
■ United States stocks, an expected 10-year return of 3.9 percent, annualized, down from a projection of an 8 percent annualized return, made in March 2013;
■ Stocks from markets outside the United States, 6.5 percent, annualized, down from 8.7 percent in 2013.
■ A diversified portfolio of United States bonds, 3.3 percent, annualized, up from 1.7 percent in March 2013;
■ Bonds from outside the United States, 2.9 percent, up from 1.8 percent;