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Vanguard projects lower stock returns ahead for US investors
Vanguard forecasts 3.3% to 5.3% annualized returns for the US stock market over the next decade, below the 15.26% annualized S&P 500 return since 2015.
Vanguard is warning US investors about the outlook for returns, citing its 10-year forecast for multiple asset classes. The firm published the outlook in July, covering markets from municipal bonds and mortgage-backed securities to US stocks.
According to Vanguard, the US stock market is expected to deliver annualized returns of 3.3% to 5.3% over the next 10 years. The forecast is notably lower than the annualized S&P 500 return of 15.26% since 2015.
The report also points to a weaker environment for growth stocks, with expected annualized returns of 1.9% to 3.9% over the same period. The range is described as close to the roughly 4% withdrawal rate some retirees depend on to meet living expenses.
The article notes that Vanguard’s outlook could be a concern for people who are already retired or nearing retirement with portfolios heavily weighted to US stocks, while the forecast is framed as a contrast to strong performance in prior years. It also says the report identifies other asset classes that could perform better ahead, though details beyond the excerpt are not included here.
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