Thursday, February 2, 2012

The Coming Decade

It's often said that no one really knows where the stock market is going at any given time. So it seems like a fool's errand to try to predict the market for the next ten years. But the mutual fund giant Vanguard is attempting to do so anyway. Here are some aspects of their decade-long forecast, just out this week:

* Global stock markets are projected to return between 6 and 9 percent annually, slightly below the long-term historical average of 9.8 percent. Vanguard sees little difference in long-term returns between domestic stocks and foreign ones.

* The taxable U.S. bond market is forecast to return somewhere between 1.5 and 2 percent per year.

* Inflation will remain right around where it is today, in the 2 to 3 percent range.

* The American economy is projected to grow at 2 to 3 percent annually, again right about where it is today.

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