Wednesday, June 29, 2016

High Expectations

A recent survey by the British asset management company Schroders found that most investors have extremely unrealistic investment expectations. American investors, and millennials in particular, have the most inflated expectations of anyone in the world.

What do Americans expect to generate in annual income? A whopping 11.1 percent return. American millennials, aged 18 to 35, are nearly as optimistic, with expectations of 10.2 percent returns. Their investing peers in Europe and Asia seek 7.9 percent and 9.7 percent returns, respectively.

What can investors actually expect? The average stock market yield globally is about 4 percent. For bond investors, benchmark interest rates in major developed markets are at 0.5 percent or lower, or even negative.

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