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I took the anticipated returns as noted in the article for bonds at 3% and stocks at 6% and I ran a forecast of what my portfolio would be expected to return based upon it's current asset allocation. It bubbled close to 4%. According to Morningstar's Portfolio Manager in doing a ten year lookback (portfolio's current configuration) returned better than 8%. So, in short words I should expect about half of what I received from the market going forward for the next ten years when compared to the past ten year period. With this, I just may have to make some special investment positions from time-to-time if I want to better these projected return estimates as I'd like to at least average 5% to 6%; and, I don't want to be fully invested in stocks to do it. So, it looks as though I will have to make those spiff investment positions, from time-to-time, to achieve my return goal.
So, in short words I should expect about half of what I received from the market going forward for the next ten years when compared to the past ten year period.
I concur with the range of 4% total return. Not quite as bearish as GMO forcast earlier, but unlikely to match the historical averages.
Comments
I took the anticipated returns as noted in the article for bonds at 3% and stocks at 6% and I ran a forecast of what my portfolio would be expected to return based upon it's current asset allocation. It bubbled close to 4%. According to Morningstar's Portfolio Manager in doing a ten year lookback (portfolio's current configuration) returned better than 8%. So, in short words I should expect about half of what I received from the market going forward for the next ten years when compared to the past ten year period. With this, I just may have to make some special investment positions from time-to-time if I want to better these projected return estimates as I'd like to at least average 5% to 6%; and, I don't want to be fully invested in stocks to do it. So, it looks as though I will have to make those spiff investment positions, from time-to-time, to achieve my return goal.