Eagles, Ten Percent, Seven Percent discussed on Business Beware


From the eagles stills nash good job today curtis you know you're reminding me of all those gigs i used to play when i was like twenty two years old due to the song actually all that crosby stills nash stuff and the eagles which came a little bit later hall best live group i've ever heard the eagles yeah seriously okay ben carlson wrote about this and he alluded to the schroeder's global investors survey now this is a real live survey looked at twenty two thousand one hundred individuals from around the globe and the results were quite interesting investors they said expect an annual return of ten point two percent on their investments over the next five years that's pretty pretty good i hope they're right see if they would have asked me i would have said seven i would have said seven percent and i still would say that ought to be honest with you but that's that's what they're saying show those born between one thousand nine hundred eighty two and nineteen ninety nine nine eleven point seven that's the millennial generation they expect even more millennials are the ones that said they didn't want to have anything to do with the stock doc market because they lost their parents lose their shorts and that last great recession gen xers born nineteen sixty five the nineteen eightyone which is age thirty six fifty two nine point eight percent a little bit more realistic us baby boomers eight point six percent and the socalled silent generation born between one thousand nine hundred twenty three and nineteen forty four those that are seventy three and older eight point one percent maybe i'm just getting older but as much as i'm in support of a lot of the economic stuff that we're getting out of washington right now and as optimistic as i am i think it is a tad bit dangerous for us to assume a rate of return on our portfolio that is significantly higher than seven percent explain why most of us are not a hundred percent invested in the stock market when we look at ten percent returns or nine point six or eleven point one or whatever they might be we are typically discussing the standard and poor's five hundred or an amalgam of dow stocks smp stock small cap stocks international stocks but they're all stocks now when you get closer and particularly to retirement you're probably not in a one hundred percent stock environment we talked about the fed raising interest rates three times over the course of the next year three or four times that will not have a very short term positive impact on bonds so if stocks are going to average you think they're gonna average ten percent and you're in a sixty forty mix of stocks and bonds bonds aren't gonna average five percent if stocks are averaging ten in my humble opinion and i think it would be foolish for you to make that that leap how many bonds safe bonds are paying fibers how many government bonds are paying five none nothing so so in that regard you got a dial down your bond expectation but even if you left it at four and make the math simple if you're a fifty fifty mix you got a ten percent return that you're expecting and a four percent return yet to together that's fourteen you divide by two that seven you get to a seven you don't get to a ten so so when you're doing these calculations and you're sitting down i of the years coming up this has been a lot of people do they're planning for the full year and maybe you're going to meet with your financial adviser and discuss your financial plan don't throw in numbers like ten percent return first off i'm saying.

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