I had heard pre 2008 returns were around 8% annually. Since 2008 it's been around 12%. Expect a mean reversion for a bit- 4% at best.

There are MUCH MUCH better forums to get financial advice than DCUM. OP please look elsewhere.

Anonymous wrote:DCUM gives the craziest financial advise and has the most conservative assumptions I’ve ever seen.

You are definitely right about the crazy financial advice. It's shocking to me that most people on dcum have very high incomes yet are absolutely clueless about the basics of investing. Maybe they just have no interest in investing? Or their liberal arts education didn't teach them anything about asset allocation or economics.

The future is unknown, so assumptions or projections are all over the place. I highly doubt that even economists at Univ of Chicago predicted that Japan would go to shit for 30 yrs. The same thing could happen here. Most American investors are betting on the US, and betting on one country can really pay off, or you can get your ass handed to you.

DCUM gives the craziest financial advise and has the most conservative assumptions I’ve ever seen.

Anonymous wrote:

Anonymous wrote:I assume 2 percent real and 2 percent inflation, so a 4 percent nominal return.

lol

you are insane if you think the markets will have a 4% nominal return over 25 years..sure, a sector might, but you are letting your emotions get the best of you.

Insane? No, I just have a good idea of international comparators. It is easy to look back after 120 years of American hegemony and think that things will necessarily continue to evolve in the same way.

The Japanese stock market was still 25 percent below the peak 30 years after the crash, and oir demographics look more like theeirs now than the US in the 1970s.

So a reasonable conservative assumption is that the stock market grows in line with nominal GDP, which is likely to be at around 4 percent nominal or two percent real. If it is higher, so much the better. But don’t look at US returns fron the last 50 or 100 years and assume that that is necessarily the way it is going to be.

If you are t expecting to make 10%+ a year I'd pull it better off buying cds and real estate

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

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?

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.

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.

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.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I assume 2 percent real and 2 percent inflation, so a 4 percent nominal return.

lol

you are insane if you think the markets will have a 4% nominal return over 25 years..sure, a sector might, but you are letting your emotions get the best of you.

at least it's better to let cautious emotions get the best of you than it is to just blithely assume 10 percent returns are continuing forever

The only things you can control are what you make, what you spend and what you save/invest.

Don't worry about the market. Invest appropriately and sock the money away. Odds are it will be much higher than 4%

Right, but if you can, it's better to save as if returns will be 4 percent than to save as if returns will be 12 percent. If you're wrong expecting 4 percent, you just wind up with more money. If you're wrong expecting 10 percent, you've got a problem.

Anonymous wrote:All our investments are currently in a mixture of broad index funds or target retirement date funds of 2050 or 2055. If I’m using online calculators to project over the next 20-25 years what would assume for an average annual return?

4 over inflation is probably about right for planning. Likely will be 7 over inflation but you can't have a plan for that.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I assume 2 percent real and 2 percent inflation, so a 4 percent nominal return.

lol

you are insane if you think the markets will have a 4% nominal return over 25 years..sure, a sector might, but you are letting your emotions get the best of you.

at least it's better to let cautious emotions get the best of you than it is to just blithely assume 10 percent returns are continuing forever

The only things you can control are what you make, what you spend and what you save/invest.

Don't worry about the market. Invest appropriately and sock the money away. Odds are it will be much higher than 4%

Anonymous wrote:

Anonymous wrote:I assume 2 percent real and 2 percent inflation, so a 4 percent nominal return.

lol

you are insane if you think the markets will have a 4% nominal return over 25 years..sure, a sector might, but you are letting your emotions get the best of you.

at least it's better to let cautious emotions get the best of you than it is to just blithely assume 10 percent returns are continuing forever

Anonymous wrote:I assume 2 percent real and 2 percent inflation, so a 4 percent nominal return.

lol

you are insane if you think the markets will have a 4% nominal return over 25 years..sure, a sector might, but you are letting your emotions get the best of you.

I assume 2 percent real and 2 percent inflation, so a 4 percent nominal return.