The question, of course, is: The rate of return of what exactly?
- Your porfolio?
- The Dow?
- The S&P 500
- The U.S total stock market (i.e. Wilshire 5000)?
- A diversified portfolio allocated across various asset classes, including a bond portion?
Nominal or real, etc., etc.
With that said...
How, I wonder, did the great one come up with precisely 6.9%?!! :confused: I mean really, a guess at future returns is just that, and could hardly be narrowed down to the tenth of a percent. Even by the hallowed one from Omaha. Don't you think?
I think that given the growth potential of the global markets that we could likely see the same type of returns that the U.S. market has seen over the last 100 years or so. So if you weight them heavily enough then you just might get a good 10% in a globally allocated stock portfolio. That's my wild a$$ guess.
Check back in 20-40 years and we'll see if I'm right.
Am I betting on that in my personal portfolio? Naaaaahhh.