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Rick Ferri's latest 30-year forecast
03-30-2016, 06:08 AM
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#1
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Give me a museum and I'll fill it. (Picasso)
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Location: NC
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Rick Ferri's latest 30-year forecast
Not a be all end all, but another data point for consideration. Won't be a surprise to most investors here.
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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03-30-2016, 08:11 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Nov 2010
Location: Sarasota, FL & Vermont
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If I apply his nominal returns to my target AA I get a weighted average of 6.0% and I used 5.5% in my deterministic retirement projections so I feel fine. Also, I assumed 3% inflation so 2.5% real and he would be at 4% real with 2% inflation.... so that feels even better!
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If something cannot endure laughter.... it cannot endure.
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Slow and steady wins the race.
Retired Jan 2012 at age 56
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03-30-2016, 08:24 AM
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#3
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Give me a museum and I'll fill it. (Picasso)
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 Quote:
Originally Posted by pb4uski
If I apply his nominal returns to my target AA I get a weighted average of 6.0% and I used 5.5% in my deterministic retirement projections so I feel fine. Also, I assumed 3% inflation so 2.5% real and he would be at 4% real with 2% inflation.... so that feels even better!
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I sure hope Ferri is right!
With my super-conservative AA, it looks like around 3.8% return without considering inflation. I am fine with spending 2% or less, so things are looking good here, too. 
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Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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03-30-2016, 10:02 AM
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#4
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Give me a museum and I'll fill it. (Picasso)
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Join Date: May 2006
Location: west coast, hi there!
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I wonder what he predicted in 1986?
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03-30-2016, 10:16 AM
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#5
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Give me a museum and I'll fill it. (Picasso)
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I'm curious how they figure to get 2.6% real returns over the next 30 years from 30-yr TIPS when those bonds currently only yield 0.8% real. Seems if you buy 30-yr TIPS, you're stuck with a 0.8% return for the next 30 years.
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Retired early, traveling perpetually.
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03-30-2016, 10:33 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 1,495
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I like Ferri, but view any and all forecasts as financial porn.
"The only function of economic forecasting is to make astrology look respectable".
- John Kenneth Galbraith
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03-30-2016, 03:32 PM
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#7
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
Posts: 2,650
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Nice, thank you. Ferri is a real optimist. Hope he's right 
Guess Ferri also doesn't believe that higher rewards also always involves more risk.
E.g. foreign gov. bonds 2.4% with a deviation of 9, while 30y TIPS have 2.6% also with 9.
Curious what a plot of returns vs. std deviation would look like.
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03-30-2016, 04:00 PM
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#8
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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Quote:
Originally Posted by Lsbcal
I wonder what he predicted in 1986?
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Exactly. Even 1996 would do.
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03-30-2016, 04:03 PM
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#9
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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Curious why he left out commodities, currencies, and Au. Ain't like the US$ is a constant.
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03-30-2016, 04:45 PM
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#10
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gone traveling
Join Date: Sep 2013
Posts: 1,248
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Even optimist like me with 100% in equities finds those numbers a bit too good....but certainly possible.
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03-30-2016, 06:30 PM
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#11
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Give me a museum and I'll fill it. (Picasso)
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Location: SW Ohio
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Does a Financial Advisor get more (or wealthier) clients if they offer a better outlook?
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03-31-2016, 04:22 AM
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#12
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Thinks s/he gets paid by the post
Join Date: May 2014
Location: Utrecht
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Typically what works best is underpromise, and overdeliver.
Unless you make money solely from writing stories. Then we like happy endings.
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03-31-2016, 07:49 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Feb 2006
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The returns certainly look optimistic to me, but all I'm going on is the number of furrows on Janet Yellen's brow. Still, my plan is to be able to fund retirement with very low returns.
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“So we beat on, boats against the current, borne back ceaselessly into the past.”
Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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03-31-2016, 08:11 AM
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#14
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Give me a museum and I'll fill it. (Picasso)
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Join Date: May 2004
Location: SW Ohio
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Quote:
Originally Posted by Totoro
Typically what works best is underpromise, and overdeliver.
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True, in most lines of work. But if it's hard to objectively assess results (or the results can be explained with sufficient credibility), then maybe overpromising works for long enough to make it worthwhile.
If an FA can match or outperform the indexes, he's probably going to keep customers, even if those indexes don't match previous, overly-rosey, predictions. The important thing is to get them to sign on initially.
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03-31-2016, 02:39 PM
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#15
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Full time employment: Posting here.
Join Date: Apr 2015
Posts: 903
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Looks like Ferri's a lot more optimistic than I am. 
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