Vanguard's 10-Year Investment Forecast Predicts a +5.7% per Year Real Return

Excerpt:

"Vanguard predicts a most likely case of a +5.7% real annual returns for stocks, but other experts are more cautious.

In his new book, Rational Expectations, William J. Bernstein predicts a +2% real return for large-cap stocks and +3% for small-cap stocks over the next decade.

Rob Arnott, chairman of Research Affiliates, forecasts a +3% real return over the next decade."

My own opinion is that the future is even more uncertain than the ranges shown in the Vanguard model — especially on the downside.

And as I see it, the world is a less predictable place than ever before.

Read the entire report here...

Vanguard Capital Markets Model: 10-Year Investing Forecast

Status of Our Vantage Point Investment Models

THREE of our Vantage Point Models have changed since last week.

Our Intermediate-Term Stock Model, our SmallCap Momentum Model and our High-Yield Bond Model all turned NEGATIVE on Friday, May 7. All THREE of these Models turned POSITIVE in February 2010, but are now NEGATIVE.

As of the close on Friday, May 7, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 7, 2010.
Our SmallCap Momentum Model is NEGATIVE as of May 7, 2010.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is NEGATIVE as of May 7, 2010.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
• Value funds over Growth funds                 (since 02/19/10)
• U.S. funds over Foreign funds                   (since 11/27/09)
• SmallCap Value over LargeCap Growth     (since 12/18/09)

Status of Our Vantage Point Investment Models

NONE of our Vantage Point Models have changed since last week.

As of the close on Friday, April 30th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is POSITIVE as of February 19, 2010.
Our SmallCap Momentum Model is POSITIVE as of February 19, 2010.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of February 26, 2010.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
• Value funds over Growth funds                 (since 02/19/10)
• U.S. funds over Foreign funds                   (since 11/27/09)
• SmallCap Value over LargeCap Growth     (since 12/18/09)

Status of Our Vantage Point Models - TWO Model Changes!

This week we have TWO Vantage Point Model changes.

On Friday, February 12th, our Growth vs Value Switching Model began to favor Value funds over Growth funds for the first time since January 8, 2010.

Also on Friday, February 12th, our High-Yield Bond Model turned NEGATIVE for the first time since July 24, 2009.

As of the close on Friday, February 12th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is NEGATIVE as of February 12, 2010.

In our relative strength work, we NOW favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
• Value funds over Growth funds                 (since 02/12/10)
• U.S. funds over Foreign funds                   (since 11/20/09)
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  
  

Status of Our Vantage Point Investment Models

NONE of our Vantage Point Models have changed since the last update.

As of the close on Friday, January 29th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
• Growth funds over Value funds                 (since 01/08/10)
• U.S. funds over Foreign funds                   (since 11/20/09)
• SmallCap Value over LargeCap Growth     (since 12/18/09)

Status of Our Vantage Point Investment Models

NONE of our Vantage Point Models have changed since the last update.

As of the close on Friday, January 22nd, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
  
• Growth funds over Value funds                 (since 01/08/10)
  
• U.S. funds over Foreign funds                   (since 11/20/09)
  
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  

Status of Our Vantage Point Investment Models

As of the close on Friday, January 15th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
  
• Growth funds over Value funds                 (since 01/08/10)
  
• U.S. funds over Foreign funds                   (since 11/20/09)
  
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  

Status of Our Vantage Point Models - ONE Model Change!

This week we have ONE Vantage Point Model change.

On Friday, January 8th, our Growth vs Value Switching Model began to Growth funds over Value funds for the first time since November 13, 2009.

As of the close on Friday, January 8th, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we NOW favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
  
• Growth funds over Value funds                 (since 01/08/10)
  
• U.S. funds over Foreign funds                   (since 11/20/09)
  
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  

Status of Our Vantage Point Investment Models

As of the close on Friday, January 1st, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
  
• Value funds over Growth funds                 (since 11/13/09)
  
• U.S. funds over Foreign funds                   (since 11/20/09)
  
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  

Status of Our Vantage Point Investment Models

As of the close on Friday, December 25, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
  
• Value funds over Growth funds                 (since 11/13/09)
  
• U.S. funds over Foreign funds                   (since 11/20/09)
  
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  

Status of Our Vantage Point Investment Models

As of the close on Friday, December 18, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds         (since 12/18/09)
  
• Value funds over Growth funds                 (since 11/13/09)
  
• U.S. funds over Foreign funds                   (since 11/20/09)
  
• SmallCap Value over LargeCap Growth     (since 12/18/09)
  
  

Status of Our Vantage Point Investment Models

As of the close on Friday, December 11, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.
Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.
Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• LargeCap funds over SmallCap funds         (since 10/23/09)
• Value funds over Growth funds                 (since 11/13/09)
• U.S. funds over Foreign funds                   (since 11/20/09)
• LargeCap Growth over SmallCap Value     (since 10/30/09)
  

Status of Our Vantage Point Investment Models

As of the close on Friday, November 6, the status of our Vantage Point Models is as follows:

Our Intermediate-Term Stock Model is NEGATIVE as of May 16, 2008.

Our SmallCap Momentum Model is NEGATIVE as of January 4, 2008.

Our Treasury Bond Model is NEGATIVE as of February 20, 2009.

Our High-Yield Bond Model is POSITIVE as of July 24, 2009.

In our relative strength work, we favor:

• SmallCap funds over LargeCap funds   (since 07/24/09)
• Growth funds over Value funds           (since 07/24/09)
• Foreign funds over U.S. funds             (since 02/29/09)
• LargeCap Growth funds over SmallCap Value funds (since 03/07/08)