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

S&P 500 Year-End Price Targets - The Range is 1238 to 1550...

The S&P 500 closed at 1,258 at the end of 2010.

By year-end 2011, a S&P close of 1,238 (the lowest target) would represent a -1.6% decline.

An advance to 1,550 (the highest target) translates to a +23.3% gain for 2011.

The average of all targets is 1,402, which would represent an +11.5% advance.

Why Do We Put So Much Blind Faith In The Federal Reserve?

The Federal Reserve released a 3-year forecast for our nation's unemployment rate on 11/20/2007.  

The Fed believed that unemployment would be no higher than 4.9% during calendar year 2010.

As of 12/31/2010, the national unemployment rate was 9.4%.

(source: Federal Reserve, Department of Labor)