Last year turned out to be another good one for US stock returns. Alphaville has no intention to delve into the oeuvre of year-ahead outlooks, and if you want to here’s where to go. But a recent-ish report from Absolute Strategy Research looking at the capital market forecasts of yesteryear did pique our interest.
Not because it shows how wrong long-term equity return predictions have been. But rather because it shows how remarkably unresponsive they have been to market valuations, the economic cycle, or indeed pretty much anything.
In addition to proprietary data, ASR draw on annual surveys published by Horizon Actuarial, which each year goes out and grabs a wide variety of financial companies’ forecasts for returns over the coming decade. Think investment banks, asset management firms, investment consultancies. These forecasts will form the basis of advice given to institutional clients’ strategic asset allocations — the biggest and most important investment decisions they take.
We’ve pulled together the data for the past 13 years to show you quite how unmoving these projections have been. Toggle the filter below to see how 10-year ahead forecasts for expected returns change by equity market. Or rather, how little they actually change.
