I find a major
disconnect among investors on Main Street and Wall Street about what
they expect to earn from their securities portfolio over the next
ten, twenty, even fifty years, after tax and inflation.
Admittedly, that
is a tough prediction because investors must take income taxes and
inflation into account, along with projected securities’ yield and
market returns. None of that is simple.
In one survey I
noted net/net/net predicted return by a number of experts over the
next fifty years. Those returns ranged
between 2% and 3% annually.
That is unusual
and shocking to many. Investors’ experience from the past would
have had expectations of close to 6%.
In other words,
many securities markets observers believe that potential, along with
taxation and inflation bites, will reflect dismal
future market returns.
(
See the Earl J. Weinreb NewsHole® comments.
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