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 Research Brief: U.S. Market Return Forecasts |
Midwest prepares ten-year U.S. equity and fixed income return forecasts using historical data and current valuations. They are calculated in an unbiased manner to help clients set realistic objectives, focus on the long-term, and control expenses.
HISTORICAL U.S. ANNUAL RETURNS
1926 to 2007
FORECASTED U.S. ANNUAL RETURNS
2008 to 2017 - Ten Year Holding Period
Notes: Returns are prior to portfolio management expenses and taxes. "Stocks" refers to all publicly held U.S. companies for which pricing is readily available. "Bonds" refers to all U.S. Treasury, agency, mortgage backed, and investment grade corporate debt with one to thirty-year maturities.
Methodology: Stock forecast is based on historical U.S. equity market returns and the assumption that earnings growth, the price-to-earnings ratio, and inflation will revert to the mean over the next ten years. Bond forecast is based on the current U.S. bond market yield-to-maturity and the assumption that inflation will revert to the mean over the next ten years.
Sources: Federal Reserve Bank, Ibbotson Associates, Lehman Brothers, Inc., Standard & Poor’s, and Wilshire Associates, Inc.
Disclaimer: Midwest uses these historical and forecasted return estimates as base rates only, and does not make any claim to their accuracy. Therefore, the firm cannot in any way be responsible for actual or opportunity losses that an investor may incur through their use.
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Past performance does not guarantee future success. All investments are subject to risks, including the possible loss of principal. You should consider Midwest based on the suitability of its investment strategies in relation to your objectives and risk tolerance. By using this website, you acknowledge that you have read and accepted Midwest's Terms of Use.
All content copyright © 2006 Midwest Asset Management, Inc. All rights reserved.
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