Update to Article 6.2 – Expected future returns and risks

More than a few people have been interested in my compilation of expected future stock and bond returns and risks in Article 6.2.  Since the article was first written in mid-2016, I have run across a couple more suitable future return predictions for U.S. stocks.  So, I have updated the compilations in this article accordingly.  I also added some additional commentary and links on the uncertainties involved in these types of estimates.  In summary, the additional estimates of expected future U.S. stock returns are still in the range of 4 to 6%, using non-inflation adjusted central tendency estimates.  See Article 6.2 for more details.

Despite the clear uncertainties involved in such estimates, it’s interesting that most of these predictions are in general agreement for both stocks and bonds.  That gives me pause, because I’m always wary when everyone agrees about the future.  Larry Swedroe pointed out recently that “sure things” have a funny way of evaporating or morphing into something entirely new over time.  If I had to guess, I think we all may be quite surprised by the actual stock and bond returns in the next 10 years.  The problem is, I don’t know whether it will be a nice surprise or scary surprise.  And you can count on the fact that no one else knows for sure either.

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