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Past performance?
Old 02-20-2014, 11:57 AM   #1
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Past performance?

Kind of tough to look at past performances as most everything is up 100% on the 5 year mark.

no expert here: but there is no way the future 5 years will be anywhere near that good. I have no idea but would guess it will plug along at a couple (few) points above inflation.

I will report back in 5 years.
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Old 02-20-2014, 12:18 PM   #2
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Quote:
Originally Posted by ducky911 View Post
Kind of tough to look at past performances as most everything is up 100% on the 5 year mark.

no expert here: but there is no way the future 5 years will be anywhere near that good. I have no idea but would guess it will plug along at a couple (few) points above inflation.

I will report back in 5 years.
YW is say'n pretty much the same thing about me!
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Old 02-20-2014, 12:59 PM   #3
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Just go back a little farther then.
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Old 02-20-2014, 04:55 PM   #4
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If you search this forum, Bogleheads, or the wider internet, you can find any number of scholarly and semi-scholarly opinions on expected "real returns" of the market. I searched "60/40 real returns" and had plenty to read.

From what I synthesized from the better articles, projections in the range of 1.5-3% above inflation seem likely reasonable most convincing. But clearly these projections are based to at least some degree on analysis of long term past performance and the future can always be different. Also, projecting like this only makes sense in terms of many years or decades, not year-to-year or heaven forbid month-to-month performance.

just my two cents
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Old 02-20-2014, 05:39 PM   #5
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When projecting the future, my practice for years has been to assume no more than a 1% real return (above inflation). So far, I keep being pleasantly surprised, but my conservative nature keeps my expectations down at that level.
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Old 02-20-2014, 06:01 PM   #6
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I predict that within the next five years the Cubs will win the world series.

I too look at those projected returns for the future as I stategize for the future but the man behind the mirror keeps whispering to me that anyone who says he can predict the future is but one thing. A lyer.

While the market could double or more in the next five years the odds are not likely at these valuations. Still Mr Market has made many learned prognosticators look foolish in the past.

Many many excellent folks in finance are predicting lower returns for the future and I pay attention but nonetheless they still could be wrong.

I do feel, however, that I likely am preaching to the choir here.
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