Thesaints wrote: ↑Mon Apr 12, 2021 4:03 pm
With a P/E above 40 that's not the most likely result going forward.
You seem to forget that we are talking about 30 years.
We may indeed have poor returns for the next 10 years or even longer.
But bad years are followed by good years.
If you believe in valuations and "expected" returns, then you have to believe it both ways.
If we have 10 bad years, then valuations are likely to be lower, and expected returns will be higher for the next 10 years.
And your thought that nothing will change in the bond arena for 30 years straight is, well, to be nice, likely incorrect.
A 30-year retirement doesn't depend solely on short-term returns, in either stocks or bonds.
Someone who retired in 2000 with valuations at 40 still has made like 7% nominal a year over the past 21 years.
Those first 10 years were bad indeed, but, so far, bad years are followed by good years.
Someone who retired in 1966 experienced like 16 years of bad stock returns (AND negative bond returns), yet still 4% worked (okay 3.8%) over 30 years, because the 16 years of bad returns were followed by 14 years of good returns.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”