Vanguard execs: Stock investors will be stepping off the gas for years to come
Vanguard execs: Stock investors will be stepping off the gas for years to come
https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Ignore. I used to get really into these predictions, read 30 pages of Bogleheads arguing about future returns, and now realize it was a huge waste of time. Just keep dumping into VTSAX/your AA.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
What does "stepping off the gas" even mean? My car goes faster when I step on the gas because I want it to go faster (much faster some times ). Cause and effect. Stocks don't go up because investors want them to, so desire has nothing to do with it.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
I like Tim , but it’s his job as Captain of the ship to do some risk management at Vanguard. I was for years amused and asking myself why Vanguard and other firms even trying to predict what coming next year or years after. Anyway, part of Vanguard management to lower expectations, that’s what they do and done.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Should you be concerned? It’s all about your risk tolerance. I almost 52 am not, I just bought a boatload of International index ( IXUS) on Friday right before close. My biggest holdings still VTSAX . Should I be concerned? Not in my lifetime. My biggest concern is taking care my health , that is why I do routinely, I exercise .
“ Nobody knows nothing “ Jack Bogle.
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
He has a 50/50 chance of being right. Didn’t they also recommend a bigger stake in international funds? I’m sticking with my three fund portfolio and AA.
"I started with nothing and I still have most of it left."
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
It's noise. Tune out the noise.
You should have accepted the fact that stocks are risky, even over holding periods of 15-20 years. If you haven't, you need to.
Having done that, it has always been the case, at any point in time, that even if you restrict yourself to people you respect and feel are credible, some will be anticipating high stock returns, some will be anticipating low returns, some will say stocks are "overvalued" (whatever that means) and others that stocks are "undervalued." You can't know who will be right. The article talks about a 7.5% "Wall Street consensus," but there's no evidence that you can predict the future from a "consensus" of experts. (How would you decide whom to include in that "consensus?")
Now, Vanguard has published a paper on the economic and market outlook. Their central numbers got a fair amount of press attention when it came out, yet few reporters bothered to say anything about the range:
When Buckley talks about "2-4%," you can see that 4% is just about the center of the forecast for "U.S. large cap." But you can also see that 2% is within the likely, green range, and so is the 7.5% "consensus" number.
Furthermore, the entire range is from -2% up to 12%. Even if you believe that Vanguard's models are absolutely correct--which is nonsense--they are not saying "the model forecasts 4%." They are saying "the model tested a range of possibilities, and it almost always came out somewhere between -2% and +12%."
So that is what we should be using as our mental planning number. On the average, over the next ten years, our stocks very well could lose an average of -2%/year, or gain +12% or year, and have about a coin-flip chance of being outside the range 2% to 7%.
That is the kind of uncertainty stock investors need to face.
Think "I'll probably get somewhere between -2% and +12%." And then you can ignore anyone bloviating on whether the real number will turn out to be 3% or 7%.
You should have accepted the fact that stocks are risky, even over holding periods of 15-20 years. If you haven't, you need to.
Having done that, it has always been the case, at any point in time, that even if you restrict yourself to people you respect and feel are credible, some will be anticipating high stock returns, some will be anticipating low returns, some will say stocks are "overvalued" (whatever that means) and others that stocks are "undervalued." You can't know who will be right. The article talks about a 7.5% "Wall Street consensus," but there's no evidence that you can predict the future from a "consensus" of experts. (How would you decide whom to include in that "consensus?")
Now, Vanguard has published a paper on the economic and market outlook. Their central numbers got a fair amount of press attention when it came out, yet few reporters bothered to say anything about the range:
When Buckley talks about "2-4%," you can see that 4% is just about the center of the forecast for "U.S. large cap." But you can also see that 2% is within the likely, green range, and so is the 7.5% "consensus" number.
Furthermore, the entire range is from -2% up to 12%. Even if you believe that Vanguard's models are absolutely correct--which is nonsense--they are not saying "the model forecasts 4%." They are saying "the model tested a range of possibilities, and it almost always came out somewhere between -2% and +12%."
So that is what we should be using as our mental planning number. On the average, over the next ten years, our stocks very well could lose an average of -2%/year, or gain +12% or year, and have about a coin-flip chance of being outside the range 2% to 7%.
That is the kind of uncertainty stock investors need to face.
Think "I'll probably get somewhere between -2% and +12%." And then you can ignore anyone bloviating on whether the real number will turn out to be 3% or 7%.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Be concerned if you want to. But what good does that do you?
Will you choose not to be mainly invested in VTSAX for the next 15-20 yrs?
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
The flavor of the Kool-Aid and the color of the swimming pool water doesn’t change anything except emotional reaction, fear level, comfort zone, or cognitive bias. Yet, data, news, and input continues to heavily influence human behavior.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Remember: “When E.F Hutton talks….Everybody Listens”?
Ignore the noise.
Stick to one’s IPS.
j
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
You are quite wrong on that. When the market is going up investors as a group become over confident and put money into stocks that have already gone up as much as the companies balance sheets justify and that pushes the price up by a "Speculation factor" on the Hope that it will rise further. Stocks went up because a lot of people wanted them to and bet on it. Then when a down turn comes people become discouraged and stop putting new money in and even sell at a loss to pull money out completing the buy high and sell low cycle.TropikThunder wrote: ↑Sun Jan 23, 2022 3:45 amWhat does "stepping off the gas" even mean? My car goes faster when I step on the gas because I want it to go faster (much faster some times ). Cause and effect. Stocks don't go up because investors want them to, so desire has nothing to do with it.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Fund managers are just people that play with a bigger pile of other peoples chips and the average manager is just that "Average" and they as a group will also buy high and sell low partly because clients are giving them money when it is going up and withdrawing money when it is going down.
Stepping off the gas just means people will be sending in less new money to the managers for a while and some will want whats left of their money back.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
No. These guys have been so wrong so often. Just look at their past track record.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
From a mathematical perspective, you should be hoping they are right, assuming you want to work and invest for another 20 years
My posts are for entertainment purposes only.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
I don't mind if stock investors take their foot off the pedal, just keep a safe distance from crashing, and don't hit the brakes
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Given the choice, a 5 MPH fender bender is better than a 5 car freeway pile-up.anon_investor wrote: ↑Sun Jan 23, 2022 7:58 amA crash is not the end of the world. Just don't panic.
In either case "panic" isn't helpful to avoid the situation nor changing anything after the fact, so.. agree
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
A guy in a suit that works at Vanguard can predict future returns no more accurate than your neighbor down the street.
Search for black swan event on Google.
Search for black swan event on Google.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Nah, I wouldn't be concerned. The truth is you won't know if any of these predictions are correct until it's too late to take action on the information. Most predictions are wrong anyway when you look back. Set your AA and stick with it through the ups and downs. History says if you do that, you'll put yourself in the best position to succeed long term.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
The same prediction came from Vanguard in January of 2020. The last two years were great. So, you have a recent real example right there where a prediction was wrong.
There might be some truth to a longer term (in aggregate) pull back in stock appreciation when looking at current valuation metrics. But even those aren't full proof indicators.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
If the stock market only played that nicely.JoMoney wrote: ↑Sun Jan 23, 2022 8:03 amGiven the choice, a 5 MPH fender bender is better than a 5 car freeway pile-up.anon_investor wrote: ↑Sun Jan 23, 2022 7:58 amA crash is not the end of the world. Just don't panic.
In either case "panic" isn't helpful to avoid the situation nor changing anything after the fact, so.. agree
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
No, it is not yet proven wrong. Vanguard's market predictions are for 10-year returns. They do not do short term forecasting. You cannot know that the 2020 prediction was wrong until 2030.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Yes you should be concerned, but not because of that. I think you should diversify your equity position beyond VTSAX. It is my largest holding, probably 35% of my equity holdings, but you should consider international, and larger positions in small and mid cap than the total market IMO. We don’t know which equity subclass will do better the next 40 years but I suspect each of the above will all have their day in the sun and times when they don’t do well.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
More important, their forecast is for a range, not a single point. In 2030 we could see an average return of 1% or an average return of 10%, and their prediction would still not be wrong because both are within the range of possible outcomes predicted by the Vanguard Capital Markets model. See above.Svensk Anga wrote: ↑Sun Jan 23, 2022 9:33 amNo, it is not yet proven wrong. Vanguard's market predictions are for 10-year returns. They do not do short term forecasting. You cannot know that the 2020 prediction was wrong until 2030.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
The Vanguard forecast tells me that a Global Equity Portfolio will be just fine. If you take this forecast seriously, Vanguard is saying that Global diversification is important. Also there is a clear implication that diversification across factors, that is tilting towards Small and Value might well add to portfolio diversification. Even REITs offer diversification benefits relative to U.S. Large Growth.
Of course, this is just a forecast and we all know that in the shorter run that almost anything can happen. It does make sense in that hot asset classes tend to cool off and that valuations matter, there is sort of a reversion to the mean. I don't see this as a doom and gloom prediction.
Of course, this is just a forecast and we all know that in the shorter run that almost anything can happen. It does make sense in that hot asset classes tend to cool off and that valuations matter, there is sort of a reversion to the mean. I don't see this as a doom and gloom prediction.
A fool and his money are good for business.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
^ this is so well said! Puts priorities in perspective. Others would be wise to follow.Ed 2 wrote: ↑Sun Jan 23, 2022 4:25 amI like Tim , but it’s his job as Captain of the ship to do some risk management at Vanguard. I was for years amused and asking myself why Vanguard and other firms even trying to predict what coming next year or years after. Anyway, part of Vanguard management to lower expectations, that’s what they do and done.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Should you be concerned? It’s all about your risk tolerance. I almost 52 am not, I just bought a boatload of International index ( IXUS) on Friday right before close. My biggest holdings still VTSAX . Should I be concerned? Not in my lifetime. My biggest concern is taking care my health , that is why I do routinely, I exercise .
“ Nobody knows nothing “ Jack Bogle.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Thanks. Wisdom comes with age I guess. Experience too.abuss368 wrote: ↑Sun Jan 23, 2022 11:31 am^ this is so well said! Puts priorities in perspective. Others would be wise to follow.Ed 2 wrote: ↑Sun Jan 23, 2022 4:25 amI like Tim , but it’s his job as Captain of the ship to do some risk management at Vanguard. I was for years amused and asking myself why Vanguard and other firms even trying to predict what coming next year or years after. Anyway, part of Vanguard management to lower expectations, that’s what they do and done.psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
Should you be concerned? It’s all about your risk tolerance. I almost 52 am not, I just bought a boatload of International index ( IXUS) on Friday right before close. My biggest holdings still VTSAX . Should I be concerned? Not in my lifetime. My biggest concern is taking care my health , that is why I do routinely, I exercise .
“ Nobody knows nothing “ Jack Bogle.
Tony
"The fund industry doesn't have a lot of heroes, but he (Bogle) is one of them," Russ Kinnel
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
If these people could accurately predict the future why are they working at all?psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
AA: 40/41/19 - equities/positive return-zero volatility/bonds
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
But some of the ones I dug up are going to start playing out soon!Svensk Anga wrote: ↑Sun Jan 23, 2022 9:33 amNo, it is not yet proven wrong. Vanguard's market predictions are for 10-year returns. They do not do short term forecasting. You cannot know that the 2020 prediction was wrong until 2030.
csmath wrote: ↑Mon Dec 07, 2020 9:30 pm Just because I was curious... then I got bored.
Vanguard January 2013: https://www.tmag2.com/documentlibrary/1 ... 142013.pdfVanguard 2014: https://static.fmgsuite.com/media/docum ... b23cb3.pdfThe expected return differential between U.S. and non-U.S. equity portfolios is not statistically significantVanguard 2015: https://silo.tips/download/vanguard-res ... ber-2015-2the long-term median expected return for U.S. equity versus global ex-U.S. equity in Figure III-8may suggest that the expected U.S. equity market return may undercut both its own historical average and the expected global ex-U.S. equity return.Vanguard 2016: https://global.vanguard.com/documents/2 ... ook-ch.pdfThe expected return outlook for non-U.S. equity markets is modestly higher from a U.S. investor’s perspectiveVanguard 2017: https://pressroom.vanguard.com/nonindex ... r-2017.pdfAs a consequence of this strong past performance, our outlook for global equities remains guarded, in the 5%–8% rangeVanguard 2018: https://global.vanguard.com/documents/i ... 018-eu.pdfExpected returns for the U.S. stock market are lower than those for international marketsVanguard 2019: https://pressroom.vanguard.com/nonindex ... 120618.pdfExpected returns for the US stock market are lower than those for international marketsVanguard 2020: https://pressroom.vanguard.com/nonindex ... k_2020.pdfExpected returns for the U.S. stock market are lower than those for international marketsEdit to add: I'm not trying to make any points here. I was just curious what was said in the past and started snooping. Figured I'd share what I found.the expected return outlook for non-U.S. equity markets is in the 6.5%–8.5% range, higher than that of U.S. equity
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Ignore. I think for the past 3-5+ years Vanguard has predicted low stock market returns, especially in the US, predicting international would outperform the US. IIRC they predicted like 3-5% returns from the US stock market over the next decade or so, and that was a few years ago.
We've gotten what, around 20-30% returns 5/6 years in a row sans 2018? International has certainly underperformed domestic as well.
Nobody knows anything. Maybe there will be stepping off the gas...?? I could argue otherwise, but if we are talking in metaphors, maybe we are stepping off the gas, but if we were going 150mph when stepping off the gas, maybe we slow down to 100, or maybe we don't need the gas because we are going down hill or whatever lol
We've gotten what, around 20-30% returns 5/6 years in a row sans 2018? International has certainly underperformed domestic as well.
Nobody knows anything. Maybe there will be stepping off the gas...?? I could argue otherwise, but if we are talking in metaphors, maybe we are stepping off the gas, but if we were going 150mph when stepping off the gas, maybe we slow down to 100, or maybe we don't need the gas because we are going down hill or whatever lol
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Wonder if these predictions are designed to provide more business for their advisory division? Average investor may think that if future returns are poor, than an advisor will be useful. I don’t see why they would put these predictions out year after year otherwise? Follow the money.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
I'm going to predict that if I eat too much beans I'll get gas, and I'll wager that it is a much better prediction than the Vanguard execs can make.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
They’ve been way off with their predictions and asset allocation recommendations like past 10 years already, I guess your prediction probably more accurate and scientifically proven.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Ignore the noise!psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
I think it makes more sense to keep your foot firmly on the gas pedal for each and every year throughout your decades of working. You do not get to pick and choose your birthdate, death date, and for the most part - the decades that you work. If your time is "now" regarding your working career, I cannot imagine keeping the foot off the gas by investing a portion of your income from human capital each and every month/year throughout your working decades. You get what the market returns to you during your 30-40 years of working as you contribute a portion of your income each and every month into it.
Through thick and thin, just maxing out your 401k in the S&P 500 and not even counting the employer match, has been a return worthy of your discipline from 1988 to 2022 (chart below will most likely be updated by the author to include 2021 at some point). 1988 to 2022 includes all the drawdowns the market has experienced along the way, and there have been 28 (including the current drawdown we are in). If you want to count the drawdowns and see their severity with regard to the S&P 500, you can view them here: https://www.yardeni.com/pub/sp500corrbear.pdf
Here is the 401k (or 403b, or 457b) maxing out at the under age 50 contribution rate in the S&P 500 for one who has been working and doing that throughout their three decade career and change to date...
https://retireby40.org/what-if-always-maxed-401k/
This year, the maximum contribution bumps up to $20,500 for those under age 50 and up to $27,000 for those age 50 and over. Add in the company match, plus other savings in Roth IRA, taxable, etc... - why would one want to take their foot off the gas? Returns will be what they are going to be over the next decade(s). I'm all for participation, or keeping the foot on the gas. Choose your AA and keep burning gas on the journey to arrive at your destination.
CyclingDuo
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
This thread is now in the Investing - Theory, News & General forum (general discussion).
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
How are stock futures looking tomorrow? Btw it’s a great time to learn to meditate.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
You’re eligible for the 401k catch up immediately in the calendar year in which you turn 50 - so, now even if your bday isn’t until Dec. Nota bene!CyclingDuo wrote: ↑Sun Jan 23, 2022 1:31 pmIgnore the noise!psh wrote: ↑Sun Jan 23, 2022 2:22 am https://m.startribune.com/vanguard-exec ... 600138460/
Should I be concerned? I’m mainly invested in VTSAX for the next 15-20 yrs.
I think it makes more sense to keep your foot firmly on the gas pedal for each and every year throughout your decades of working. You do not get to pick and choose your birthdate, death date, and for the most part - the decades that you work. If your time is "now" regarding your working career, I cannot imagine keeping the foot off the gas by investing a portion of your income from human capital each and every month/year throughout your working decades. You get what the market returns to you during your 30-40 years of working as you contribute a portion of your income each and every month into it.
Through thick and thin, just maxing out your 401k in the S&P 500 and not even counting the employer match, has been a return worthy of your discipline from 1988 to 2022 (chart below will most likely be updated by the author to include 2021 at some point). 1988 to 2022 includes all the drawdowns the market has experienced along the way, and there have been 28 (including the current drawdown we are in). If you want to count the drawdowns and see their severity with regard to the S&P 500, you can view them here: https://www.yardeni.com/pub/sp500corrbear.pdf
Here is the 401k (or 403b, or 457b) maxing out at the under age 50 contribution rate in the S&P 500 for one who has been working and doing that throughout their three decade career and change to date...
https://retireby40.org/what-if-always-maxed-401k/
This year, the maximum contribution bumps up to $20,500 for those under age 50 and up to $27,000 for those age 50 and over. Add in the company match, plus other savings in Roth IRA, taxable, etc... - why would one want to take their foot off the gas? Returns will be what they are going to be over the next decade(s). I'm all for participation, or keeping the foot on the gas. Choose your AA and keep burning gas on the journey to arrive at your destination.
CyclingDuo
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Folks keep forgetting on these threads one thing, the S&P 500 has already returned 26% annualized per annum since 2019, and many including Vanguard were forecasting lower returns ranging in the 6%-7% range for US large at the end of 2018. It is not impossible to get to that level over the next 7 years, if the US S&P 500 had a couple of years of losses with -20% to -15% range, followed by returns in the +15% to +20% range in the other years. Just a quick plug of the numbers on my returns calc excel tells me a series of returns that goes like that will easily end up with 5% to 6% average ending 2028 and starting 2019, and it could easily return about 2% to 3% average for 2022-2028 with a couple of negative years like we had in 2000-2002 followed by stellar years in 2003-2007, so it isn't inconceivable at all.
Why are folks getting all riled up against the forecasters? sure, they don't have crystal balls and they are providing a wide range. But the base case they are projecting is very much in the realm of normal stock market behavior that we should expect. Why is there a problem accepting that. We've already had 3 outstanding years, and in order to get to the averages, we're likely to have a few negative years. That's the way it works. We do not need the market to drop 50% or even 40%, just a sequence of returns in the low double digits that are both positive and negative alternatively, in fact more positive years than negative will still get us there.
We need to go back and run our own estimates on where we wanted to be in 10 years, 3 years before. My own calculations were based on modest average returns of 5% to 6% at beginning of 2019, and if end up getting "only" there in the next 7 years, I am still going to be fine. We cannot move our goalpost by start expecting higher average returns after we've had a couple of outsized years. But we can mitigate risk by looking at the figures having exceed expectations.
Why are folks getting all riled up against the forecasters? sure, they don't have crystal balls and they are providing a wide range. But the base case they are projecting is very much in the realm of normal stock market behavior that we should expect. Why is there a problem accepting that. We've already had 3 outstanding years, and in order to get to the averages, we're likely to have a few negative years. That's the way it works. We do not need the market to drop 50% or even 40%, just a sequence of returns in the low double digits that are both positive and negative alternatively, in fact more positive years than negative will still get us there.
We need to go back and run our own estimates on where we wanted to be in 10 years, 3 years before. My own calculations were based on modest average returns of 5% to 6% at beginning of 2019, and if end up getting "only" there in the next 7 years, I am still going to be fine. We cannot move our goalpost by start expecting higher average returns after we've had a couple of outsized years. But we can mitigate risk by looking at the figures having exceed expectations.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
If you made an adjustment in 2020 due to the 10 year projection and rotated out of stocks, it was a problem for you the past few years. I think that is the point. I certainly understand what you are saying about the 10 full years.Svensk Anga wrote: ↑Sun Jan 23, 2022 9:33 amNo, it is not yet proven wrong. Vanguard's market predictions are for 10-year returns. They do not do short term forecasting. You cannot know that the 2020 prediction was wrong until 2030.
If you go back to 2011, you have your full 10 years. They were quite a bit off. Projecting a 6 - 9% equity return over 10 years when the return was really closer to 15%. Was that a good, actionable projection? I don't know. Maybe.
https://personal.vanguard.com/pdf/s289.pdf
I'm not knocking Vanguard. What does all of this discussion really boil down to? For me, it's just stick to your AA and ignore all of the noise and the projections. They tend to hurt more than help. No one can predict something like stock/bond returns when there are so many variable factors that come into play. It's good reading, and I use it as information, but making any adjustments based on projections can be very risky.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
I really hate headlines such as this.
First, what does the Minneapolis Star Tribune know about anything, much less investing and how to cover markets?
Second, as a low cost index fund investor, I don't have gas or gas pedals or any other automotive-related equipment.
Metaphors, similies and idioms are great for fiction, poetry and emotive language, etc.
Really bad for money matters.
Third, "stock investors" is a category so broad as to be meaningless.
I plan on doing as always, putting money into VSTAX on a regular basis as long as I have some to do so.
I also question the CEO of Vanguard doing road shows. What is the purpose? I know Fidelity has to, Abigail Johnson needs a new LVMH handbag every so often.
First, what does the Minneapolis Star Tribune know about anything, much less investing and how to cover markets?
Second, as a low cost index fund investor, I don't have gas or gas pedals or any other automotive-related equipment.
Metaphors, similies and idioms are great for fiction, poetry and emotive language, etc.
Really bad for money matters.
Third, "stock investors" is a category so broad as to be meaningless.
I plan on doing as always, putting money into VSTAX on a regular basis as long as I have some to do so.
I also question the CEO of Vanguard doing road shows. What is the purpose? I know Fidelity has to, Abigail Johnson needs a new LVMH handbag every so often.
My lifetime requirement for investment advice was satisfied upon reading Jack Bogle write that most people need only a low cost S&P 500 Index fund.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Great
Keep Investing
Keep Investing
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Just to clarify, the Star Tribune didn't write the article, they just published it -- the byline says "By ERIN ARVEDLUND , PHILADELPHIA INQUIRER".
Being in Vanguard's backyard, the Inquirer publishes numerous stories on Vanguard. Not that that means they know anything either
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
I'm starting to wonder if anybody knows anything.sycamore wrote: ↑Mon Jan 24, 2022 4:08 pmJust to clarify, the Star Tribune didn't write the article, they just published it -- the byline says "By ERIN ARVEDLUND , PHILADELPHIA INQUIRER".
Being in Vanguard's backyard, the Inquirer publishes numerous stories on Vanguard. Not that that means they know anything either
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
and I quote: “nobody knows nothing”…..
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
The mass media doesn't and the airheads at "wealth advisers" and on TV don't.GaryA505 wrote: ↑Mon Jan 24, 2022 4:11 pmI'm starting to wonder if anybody knows anything.sycamore wrote: ↑Mon Jan 24, 2022 4:08 pmJust to clarify, the Star Tribune didn't write the article, they just published it -- the byline says "By ERIN ARVEDLUND , PHILADELPHIA INQUIRER".
Being in Vanguard's backyard, the Inquirer publishes numerous stories on Vanguard. Not that that means they know anything either
But some guy a few decades ago decided to start the first low cost index fund, and he did...
My lifetime requirement for investment advice was satisfied upon reading Jack Bogle write that most people need only a low cost S&P 500 Index fund.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
"I'm starting to wonder if anybody knows anything."
I'm 71 and I've never ever never heard anyone say step off the gas. Must be a local term somewhere.
I'm 71 and I've never ever never heard anyone say step off the gas. Must be a local term somewhere.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
2022 Vanguard outlook
"As we look toward 2022 and beyond, our long-term outlook for assets is guarded...."
https://institutional.vanguard.com/iam/ ... 122021.pdf
The word "assets" refers to EVERYTHING in the world.
"As we look toward 2022 and beyond, our long-term outlook for assets is guarded...."
https://institutional.vanguard.com/iam/ ... 122021.pdf
The word "assets" refers to EVERYTHING in the world.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Apparently E. F. Hutton has returned from the grave.
https://efhuttongroup.com/
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
On the surface, it's a very reasonable expectation which I agree with - higher recent returns tends to imply lower returns in the near future.
However, back in 2008-2009, did they ever tell people to expect higher than average returns in the future? Because that's the flip side to it.
However, back in 2008-2009, did they ever tell people to expect higher than average returns in the future? Because that's the flip side to it.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
Does this mean "everybody knows something"? The truth, to your point, is that unless someone can correctly guess a major dip with great precision (which I yet to see) what is the point of "stepping off"? Anyone with considerable timeframe cannot afford to step out. If someone can retire or is close to retiring because of the major gains seen, then they can step back (but not out).
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
That range (2-4%) appears spot-on for historical values at current market prices. It seems like a reasonable range to expect given today's prices.
A month ago, the range was probably (1-3%).
A month ago, the range was probably (1-3%).
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
So returns on our risk will be less than inflation.
Re: Vanguard execs: Stock investors will be stepping off the gas for years to come
The answer seems simple. Invest all your money in countries like have higher gdp like China. Except I am sure there is a catch, there always is.