Reply to What % return would you assume for next 20-25 years

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Historical returns are 8%. The past decade or so has been closer to 12% annualized. So, with mean reversion, you could conservatively plan to see 4-5% annualized for the next bit. That would be in a 100% stock portfolio.[/quote]

Um, actually from 2009 to 2021, the stock market grew by over 17% on average per year. If you assume mean reversion to the historical level of 9%, that means more than a decade of 1% returns. And by the way, that one percent is nominal, so after inflation, approximately -2% returns for the next decade from the stock market. Excited yet?[/quote]

You cherry picked that data starting with 2009.. should 1991 - 2021 or 2001 - 2021 and it's more normal.

People can manipulate numbers to fit whatever view they have but data doesn't like. Long term, returns will be good as they've been the last 50 years.[/quote]

Fine, you want to do a full 20-year period?  We'll do 2001-2021.  We already talked about the 2009-2021 period, so let's look at 2001-2009.  From January 2001 to January 2009, the S&P 500 went from about 1350 to 850.  That is a -5.8% growth rate for eight years before factoring in inflation.  After inflation, we're at like -8% for eight years.  No one is saying the market is permanently dead, but if you think the stock market can't return 0% or -2% for the next 10 years, watch out.[/quote]

look at foreign stocks, bonds, etc during those time frames..it’s different.

Plus 10yr is short term in the grand scheme of investing ..op was asking about 20-25 years. There are no 25yr time periods that were poor. I study this for my career. Of course one segment of the market can go out of favor for 5-10 years. It happens more than people think. Hence why you diversify. [/quote]

But 10 years is not short term if you're actually retired.  What the market averages over the longer term isn't as relevant if you have to withdraw your capital during a downturn. The guidelines on market returns over time can be very different based on what the market is doing early in your retirement. If the downturn is early in the 25 year retirement window, you have less $$ in market during the upturn to recover.   [/quote]

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