10-Year Investing Forecast: Takeaways for Advisors

We all want to know how stocks and bonds will perform next year and beyond. Unfortunately, forecasts typically give very tight ranges of returns and often merely predict the past. That may partly explain why investors continue the pattern of buying high and selling low.

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Comments (3)
Means, averages, mid-points & percentiles are fine. But how would you use the Vanguard model to manage sequence of returns risk?
Posted by Gary D | Monday, August 04 2014 at 1:06PM ET
You have to take the returns and standard deviations and put it into a Monte Carlo simulation. My research shows a very low cost 50 / 50 portfolio has a 90% probability of supporting a 3.5% spend rate, increasing with inflation, for 30 years. Expenses and emotions dramatically lower that rate.
Posted by Allan R | Thursday, August 07 2014 at 5:39PM ET
mr.Allan R. can i take 50/50 as perhaps 50% total world stock and 50% total bond in vanguard? thank you. d.i.
Posted by dek i | Wednesday, August 13 2014 at 7:45AM ET
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