The reason for the flip over the next 10 years is the extremely elevated valuation levels of US stocks. They are by all measures very high today.
The argument goes that both international stocks and US bonds have more room to run over the next 10 years than US stocks. It's not just Vanguard. Most organizational projections have US stocks "reverting to the mean" over the medium term.
It makes logical sense. US stocks have run at a roughly 14% yearly clip for the past 10 years while international and bonds have underperformed. If you believe in the historical averages of 9 - 10% as the normal for stocks, then at some point US stocks will underperform to get back to those "normal" historical levels. All that said, markets are anything but logical. We can check back in 10 years to see if the projection was correct.
The argument goes that both international stocks and US bonds have more room to run over the next 10 years than US stocks. It's not just Vanguard. Most organizational projections have US stocks "reverting to the mean" over the medium term.
It makes logical sense. US stocks have run at a roughly 14% yearly clip for the past 10 years while international and bonds have underperformed. If you believe in the historical averages of 9 - 10% as the normal for stocks, then at some point US stocks will underperform to get back to those "normal" historical levels. All that said, markets are anything but logical. We can check back in 10 years to see if the projection was correct.
Statistics: Posted by markjk — Wed Dec 17, 2025 5:33 am — Replies 17 — Views 1405