I tend to take any forecasts beyond a year with a grain of salt, but never discount them entirely. If you still have a decade or more of work life left consider the following bad news from McKinsey.
The market is going to suck for the next 20 years, and you’re going to have to double your life savings
The “golden age” of stock market returns is over.
That’s the summary of a big piece of research from the McKinsey Global Institute (MGI), which estimated returns over the next 20 years in US and Western European markets under two scenarios. The first assumes that today’s slow-growth environment remains, while the second models faster growth as technology improves.
It concluded that in neither case would returns match those of the past 30 years. For US and European stocks, the difference between past and future annual returns could range from 1.5 percentage points to 4 percentage points. The gap for fixed-income could be even wider, between 3 and 5 percentage points for most countries, the report notes.
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That means investors will have to save more, retire later, or live less comfortably during retirement, which could further drag down economic growth. A seemingly small difference in numbers can actually be pretty scary. (source)
It’s just more reason to pursue your dreams of buying a business or three.
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