Straw poll... just curious to what people here think the future holds over the next decade
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1. What do you think the total real return for global stocks will be in 10 years?
ie including all reinvested dividends, in your local currency
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2. What do you think your own portfolio growth rate will be (time-weight, ie not accounting for any additional cashflows) over that time?
It can be higher if you think you are able to outperfrom the wider stock market, or lower if you are happy following more conservative passive approach.
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3. What level of gauranteed real return what level would you be happy to accept?
If someone offered you a deal that you had to put all your eggs in a single basket (ie liquidate all your current investment, plus put all your savings into) over the next decade and offered you a gauranteed real return on it, what rate of return would make you say Yes?
[Caveat here: you can't borrow to invest in this mythical instrument, you can only put in non-leveraged money that you have either already accumulated or will earn in the next 10yrs.]
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For me, I'll go with:
1. 5% real total return.
Slightly lower than the long run, but still a reasonable return for people who keep their money invested. Although I'm a firm believe in valuations, International markets are not horribly expensive so a global basket can still do OK
2. 8%.
Obviously as an at-least partially active investor I think I can beat the market otherwise I'd just be all in passive indexes. (The stats may say my chances are low, but hey that wasn't the question :) )
3. 4.5%. If there was risk-free 10yr inflation linked treasury that yielded 4.5%, meaning my portfolio was guaranteed to grow 55% in real terms by the end of 2031 I would probably be happy to put all my eggs in that basket.