What to Expect

What low return forecasts for U.S. stocks and bonds could mean for your plan. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=33764&elqTrackId=9a6d65390eef4c0d927ffd34cd1c963e&elq=8f10ef331ab04e3fa3c18dd55605194d&elqaid=33764&elqat=1&elqCampaignId=15771) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] One of my favorite projects each year is pulling together asset-class return forecasts from major investment providers. [The latest iteration of this project]( launched on Monday. Savvy market participants may be tempted to dismiss any attempt to forecast the future as a fool’s errand, about as helpful as gazing into a crystal ball. But the fact is, some expectation of market returns is mission-critical as you think about how you’ll go about achieving your financial goals. How much help will you get from the market, and how much of the heavy lifting will you have to do on your own? Without a ballpark estimate of what the market is apt to return, it’s impossible to know how much you’ll need to save and how much you can safely withdraw in retirement, for example. Alas, the latest roundup of forecasts suggests that sober investors shouldn’t expect that U.S. stock and bond returns will be any great shakes over the next decade. Encouragingly, however, most firms’ bond return expectations were a touch better than was the case in 2021, reflecting higher expected yields. And every firm in our survey sees much better returns for non-U.S. stocks than U.S. over the next decade. That suggests that investors who haven’t rebalanced their portfolios recently may want to address their portfolios’ U.S./non-U.S. split. If you’re looking for international stocks and funds to add to, be sure to check out Dziubinski’s wrapup]( of our analysts best non-U.S. ideas. I’ll be doing a deep dive into the topic of tuning up your portfolio in [a special webcast]( for Morningstar.com readers and viewers; that webcast will be live on Morningstar.com this coming Wednesday, January 26, at 12 p.m. CT. I’ll recap 2021 market performance and share key steps to take if you’re giving your portfolio a tuneup today. I’ll also tackle topics that are top of mind for a lot of investors right now, including stress-testing your bond funds’ interest rate sensitivity and checking up on your portfolio’s inflation protection. And if you’re not a webcast person, we’ll have lots of articles about improving your portfolio next week, too, including [this one about setting your asset allocation using a bucket approach](. With warm regards, Christine Benz [Experts Forecast Stock and Bond Returns: 2022 Edition]( U.S. equity expectations drop further still, but most firms spy better values overseas. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Paula Pant: A Different Path to Financial Independence]( The popular podcast host discusses the evolution of the FIRE movement and how she attained financial independence without a high salary. [Read More]( [How to Allocate Assets for College Savings]( Families must contend with competing challenges: time and high inflation. [Read More]( [Airing Jan. 26: Portfolio Tuneup Event with Christine Benz]( Join us as we discuss the steps to take when tuning up a portfolio, how to think about inflation and interest rates in 2022, and more. [Read More]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2022 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602