Vanguard expects annualized 10-year return forecasts for equity and bond markets to improve by about 1.0% from end of year 2021 forecasts. - due in large part to the Q1 and Q2 2022 bear market. Maybe the proverbial silver lining to a dark cloud; but, every little bit helps.
Vanguard’s global equity and fixed income outlooks (10 year forecast):
US Equities - 3.4% to 5.4% (previous estimate 2.0% to 4.0%)
Global Equities (unhedged) - 6.1% to 8.1% (previous estimate 5.1% to 7.1%)
US Bonds - 3.0% to 4.0% (previous estimate 1.5% to 2.5%)
Global Bonds (hedged) - 2.9% to 3.9% (previous estimate 1.3% to 2.3%)
The above seems to suggest that one should check their international stock exposure - albeit a tough pill to swallow when the US stock market has rather handily outperformed international stocks over the last decade. That being said, Blackrock (here) has some rather interesting data showing that when US markets return less than 6% (as potentially projected above), international stock markets have outperfromed US stock markets 94% of the time over 10-year rolling periods since 1971.
If you have questions about your retirement plan or your investment portfolio in these inflationary times, please feel free to contact Intelligent Investing at www.mynmfp.com/new-clients for a no-obligation consultation.
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David L. Hogans, Esq. is an author and the founder of Intelligent Investing, Inc., a registered investment advisor firm located in Albuquerque, NM. He earned his Bachelor of Science in Chemical Engineering (ChE) from Virginia Tech and his Juris Doctorate (JD) from the University of Dayton. Mr. Hogans is licensed to practice law in the states of Virginia and New Mexico, as well as, before the Federal Patent Bar. For more information about Mr. Hogans and his firm please see his ADV filing with the Securities and Exchange Commission (SEC) .