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What would you consider a good annual return for the stock market over the next 10 or 20 years?

UserPost

2:53 pm
October 10, 2013


bryce

Member

posts 40

I am curious what people think the stock market's annual return will be over the next 10 or 20 years. Please say if you are using nominal return or real return (which is nominal return minus inflation rate). And also answer if you will be happy if the market matches your prediction.

My prediction is that the market will return 6.5% nominal and 4% real over the next 10 years.

The mrs. and I should be able to retire in 9 years if that happens. Which will make us happy. Smile

4:54 pm
October 11, 2013


Barbara Friedberg

Member

posts 1302

Hi Bryce,

I'm hesitant to predict, but……. I'm estimating a nominal stock market return in the 6-7% range with inflation projected in the 3-3.5% range.

 

Let's check back in 5 years and check out our predictions :)

(We've hit our retirement goals)

10:23 pm
October 11, 2013


bryce

Member

posts 40

Barbara Friedberg said:

Let's check back in 5 years and check out our predictions :)
(We've hit our retirement goals)

I hope to be here. That's excellent that you've made it to retirement. Cool

5:23 am
October 29, 2013


Jasaglimbeni

Member

posts 28

As usual there will be another correction or two of over 10% some time over the next ten-twenty years, but we will probably staty to the normal 8-10% return w/ dividends reinvested. Small cap index funds should return a bit more than that. Let us not forget that over the last twenty years the market as measured by the S&P 500 has returned over 8% annually (dividends reinvested) and this occured during the tech boom and bust and the Great Recession.

 

JoeSmile

8:56 am
October 29, 2013


bryce

Member

posts 40

Jasaglimbeni said:

As usual there will be another correction or two of over 10% some time over the next ten-twenty years, but we will probably stay to the normal 8-10% return w/ dividends reinvested.

Hi Joe, I agree that we will have one or two corrections. I hope you're right about the average nominal return.

9:02 pm
November 11, 2013


Bobby @ Making Money Fast and Slow

Member

posts 9

I think it's safe to stick with the average 8-10% return over the next 10 years, but I'm pretty sure we'll see a correction within the next 5. After all, once the Fed starts unwinding its balance sheet, stocks have nowhere to go but down.

10:22 pm
November 11, 2013


bryce

Member

posts 40

Bobby @ Making Money Fast and Slow said:

I think it's safe to stick with the average 8-10% return over the next 10 years, but I'm pretty sure we'll see a correction within the next 5. After all, once the Fed starts unwinding its balance sheet, stocks have nowhere to go but down.

I imagine you are correct that the market will go down due to higher borrowing costs. It wouldn't surprise me if it was a 10% or more correction. Thanks for your input.

1:12 am
November 12, 2013


moneystepper

Member

posts 182

I too expect a significant correction upon "tapering" given that recent highs haven't been hugely supported by earnings. That said, over 10 or 20 years, i'd still expect 6-8% pa with 2-3% inflation.

2:08 pm
July 17, 2014


James Martin

townsville,qld

Member

posts 38

My prediction is 7% nominal and 2.5% real.

8:42 am
August 4, 2014


MrTravisScott

Member

posts 25

I think it all depends on what you are invested in over the next 10 or 20 years.  Are you referring to just the S&P 500 and the Dow.  Or are you talking about a diversified portfolio with emerging markets, small cap stocks, value, ect. 

Personally, I think if you have a more diversified portfolio you will average 11% with a much lower standard deviation.  If you are just investing in Large Cap Domestic stocks, then probably closer to 7-8%.


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