In case you didn't see it, Vanguard came out with its latest 10-year market forecasts the other day. I enjoy following it simply as comic relief. The only reliable outcome I've ever seen is how unreliable its projections turn out over the long-run. (Not to pick on Vanguard, but all of these "long-term" forecasts aren't worth the time and effort to put such dribble together.)
So, purely for entertainment purposes, below are some highlights of a chart of what the Vanguard Capital Markets Model shows heading into the second half of 2025:
— "U.S. equities have a moderate return forecast (3.3% to 5.3%) with 15.2% volatility."
— "Global ex-U.S. equities show higher return potential (5.1% to 7.1%) but also higher volatility at 18.8%.
— "Global equities, especially developed markets ex-U.S. (5.7% to 7.7%), also show higher return potential and higher volatility (18.2%).
— "Emerging markets equities have the highest volatility among equities (25.3%) with a lower return range (3.1% to 5.1%)."
— "Within U.S. equities, value stocks (5.8% to 7.8%) outperform growth stocks (1.9% to 3.9%) in return forecasts, though both carry significant volatility (18.7% and 16.2%, respectively).
— "Large-cap stocks (3.1% to 5.1%) moderately outperforms growth stocks, but has lower return potential than value stocks, with lower volatility at 15.0%. Small-cap stocks (5% to 7%) and REITs (3% to 5%) also show higher volatility (19.9% and 18.4%, respectively)."
— "Bond categories show lower volatility but also lower returns. U.S. aggregate bonds (4% to 5%) have 6.3% volatility, while U.S. Treasury bonds (3.8% to 4.8%) and credit (4.2% to 5.2%) are slightly more volatile ... U.S. Treasury Inflation-Protected Securities (TIPS) are projected to return between 2.8% and 3.8%, with a median volatility of 5.1%. U.S. mortgage-backed securities offer slightly higher returns of 4.4% to 5.4%, with lower volatility at 4.2%. U.S. municipal bonds are expected to return 3.5% to 4.5% with 4.8% volatility, while high-yield municipal bonds offer 4% to 5% returns at a higher volatility of 7.8%. Cash instruments show the lowest volatility: U.S. cash has a return range of 3% to 4% with 1.1% volatility, and U.S. municipal cash yields 4.5% to 6.5% with just 0.5% volatility."
— "U.S. inflation is forecasted between 1.5% and 2.5%, with 1.8% volatility."
The only plausible statement it makes comes at the end: "The chart emphasizes the fundamental investment principle that higher potential returns generally come with higher risk. It encourages investors to consider both return expectations and volatility when building diversified portfolios, balancing growth opportunities with risk tolerance."
So, purely for entertainment purposes, below are some highlights of a chart of what the Vanguard Capital Markets Model shows heading into the second half of 2025:
— "U.S. equities have a moderate return forecast (3.3% to 5.3%) with 15.2% volatility."
— "Global ex-U.S. equities show higher return potential (5.1% to 7.1%) but also higher volatility at 18.8%.
— "Global equities, especially developed markets ex-U.S. (5.7% to 7.7%), also show higher return potential and higher volatility (18.2%).
— "Emerging markets equities have the highest volatility among equities (25.3%) with a lower return range (3.1% to 5.1%)."
— "Within U.S. equities, value stocks (5.8% to 7.8%) outperform growth stocks (1.9% to 3.9%) in return forecasts, though both carry significant volatility (18.7% and 16.2%, respectively).
— "Large-cap stocks (3.1% to 5.1%) moderately outperforms growth stocks, but has lower return potential than value stocks, with lower volatility at 15.0%. Small-cap stocks (5% to 7%) and REITs (3% to 5%) also show higher volatility (19.9% and 18.4%, respectively)."
— "Bond categories show lower volatility but also lower returns. U.S. aggregate bonds (4% to 5%) have 6.3% volatility, while U.S. Treasury bonds (3.8% to 4.8%) and credit (4.2% to 5.2%) are slightly more volatile ... U.S. Treasury Inflation-Protected Securities (TIPS) are projected to return between 2.8% and 3.8%, with a median volatility of 5.1%. U.S. mortgage-backed securities offer slightly higher returns of 4.4% to 5.4%, with lower volatility at 4.2%. U.S. municipal bonds are expected to return 3.5% to 4.5% with 4.8% volatility, while high-yield municipal bonds offer 4% to 5% returns at a higher volatility of 7.8%. Cash instruments show the lowest volatility: U.S. cash has a return range of 3% to 4% with 1.1% volatility, and U.S. municipal cash yields 4.5% to 6.5% with just 0.5% volatility."
— "U.S. inflation is forecasted between 1.5% and 2.5%, with 1.8% volatility."
The only plausible statement it makes comes at the end: "The chart emphasizes the fundamental investment principle that higher potential returns generally come with higher risk. It encourages investors to consider both return expectations and volatility when building diversified portfolios, balancing growth opportunities with risk tolerance."
Statistics: Posted by BetaTracker — Wed Aug 27, 2025 9:21 am — Replies 0 — Views 52