
Vanguard dramatically cuts its expected rate of return for the stock market - SirLJ
https://www.cnbc.com/2019/02/11/vanguard-cuts-expected-return-for-stock-market-over-the-next-decade.html
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piker
A cynic might note that it is in Vanguard's interest to be conservative here
to (1) drive down client expectations and (2) increase the required savings
rate in its financial planning models. There's no upside for Vanguard to be
high and wrong on the overall market and limited (if any) downside to Vanguard
being pessimistic.

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giorgioz
Well people can invest in something else that has higher returns than 5% with
the same risk and abandon services like ETFs so Vanguard has something to
lose. You might be right though in the way that people got so used to invest
in ETFs and will still invest with a 5% gain. Vanguard might be aware of that
and might be trying to pull down the expectations to increase their margin.
This is all unfounded speculation though.

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andrewmcwatters
It's fairly rational to point out that the market is overvalued at the moment
to begin with. If anything, I'd expect some big losses in that 5% median if
economic pressures leave people worried and speculating.

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craftyguy
> It's fairly rational to point out

Stating that an opinion is rational does not automatically make it rational.
Care to explain why you think it is?

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jakamau
Not the original poster but I would point to the Shiller PE (i.e. CAPE) ratio
as a useful indicator of potential over-valuation. The increasing cost
required to make the same in earnings is disconcerting.

[https://en.wikipedia.org/wiki/Cyclically_adjusted_price-
to-e...](https://en.wikipedia.org/wiki/Cyclically_adjusted_price-to-
earnings_ratio)

[http://www.econ.yale.edu/~shiller/data.htm](http://www.econ.yale.edu/~shiller/data.htm)

