The Lemon Fool

Here is the Vanguard economists' expectations for the next ten years:

https://www.vanguardinvestor.co.uk/arti ... y-covid-19

Notably, they expect the UK market to outperform significantly over the next ten years, which perhaps makes sense given its relatively low valuation. I was thinking about cutting down from my current 24% UK, but perhaps I would be better to sit on my hands. That is usually the best thing to do when I feel the itch to trade. Do As Little As Possible (DALAP) is usually the way to go (or as little as you reasonably can anyway). They also expect bonds to do reasonably well. Nonetheless, the expected return does not look likely to beat my term accounts, which are guaranteed by the FSCS.

I think they're all optimistic by a couple of percent (real) but the expected relative performance feels about right.

BT63 wrote:I think they're all optimistic by a couple of percent (real) but the expected relative performance feels about right.

They are saying global equities unhedged annualised return will be 2.8 to 4.8%. That's VWRL if I am not mistaken. It is about 54% US equities, so it lookis like another lost decade coming up for the USA. And you reckon that it is optimistic by 2%?

I am also overweight in UK equities, but I am beginning to doubt the wisdom of this. UEFA cup feel good factor? FTSE 100 down 1.6%

S

BT63 wrote:I think they're all optimistic by a couple of percent (real) but the expected relative performance feels about right.

The expected returns are nominal, not real. At the BOE's target inflation rate of 2%, VWRL is expected to give an after inflation total return of 0.8% to 2.8%, and the UK market is expected to give give an after inflation total return of 2.9% to 4.9%. Bonds are expected to be loss making after inflation. Lean pickings, but better than putting your money under the mattress.