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Jack Bogle: 4 Percent Returns for US Stocks, 3 Percent for Bonds Over Next Decade

Jack Bogle: 4 Percent Returns for US Stocks, 3 Percent for Bonds Over Next Decade
(Iqoncept/Dreamstime)

By    |   Tuesday, 24 October 2017 04:18 PM

Investing guru Jack Bogle is maintaining a modest forecast for investors for the next decade.

The Vanguard founder sees 4 percent returns for U.S. stocks and 3 percent for bonds over the next decade.

“Pretty small returns relative to history,” he explained to Morningstar.

“In the long run, stocks have given, I think, about a 9% return and bonds about a 6 or 7; 6 probably is the better number. We'll be below what we expect, what we have come to expect from history,” he said.

“So, what does an investor do? One thing is save more. I mean, there are ways of getting a larger retirement plan account under depressed, not depressed really, but lower portfolio earnings. The other thing is watch out for costs.”

Bogle isn't alone in offering his forecasts.

BlackRock Chairman and CEO Larry Fink says investors should expect just 4 percent returns over the next 10 years with a balanced portfolio of stocks and bonds over 10 years.

"There are going to be some times where you're going to have a market setback," Fink told CNBC.

"We're talking about a balanced portfolio. We're talking about over a 10-year horizon," Fink told CNBC.

"Obviously, this year we are making far better because of the equity market return," he added, but warned some years could be much worse. "There are going to be some times where you're going to have a market setback where you could lose 20, 30, to 40 percent of the market."

Meawhile, there apparently is a global search for higher investment yield.

Saudi Arabia’s sovereign wealth fund is seeking to boost returns from its investments as it helps the kingdom reduce reliance on revenue from oil exports, Bloomberg reported.

“We benchmarked ourselves, we went to all the endowments, we went to all the sovereign wealth funds for long-term investments,” Public Investment Fund Managing Director Yasir Alrumayyan said on Tuesday at the Future Investment Initiative, a three-day conference in Riyadh that has gathered some of the finance world’s most influential people. “We are targeting between 8 to 9 percent but in 2025 till 2030.”

Saudi Arabia is stepping up plans to turn its sovereign wealth fund into a global giant. The PIF is central to the government’s effort to diversify its economy away from oil. The kingdom plans to transfer ownership of state-owned oil company Saudi Aramco, to the fund, which could eventually control more than $2 trillion, according to Crown Prince Mohammed Bin Salman.

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Investing guru Jack Bogle is maintaining a modest forecast for investors for the next decade.
jack bogle, investors, stocks, bonds, return
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2017-18-24
Tuesday, 24 October 2017 04:18 PM
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