Rounding Up Expert Forecasts for Stock and Bond Returns

Bond outlooks improve, but stocks' prospects drop on the heels of 2023's rally. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=50987&elqTrackId=07bd05f0d8504c42b1259172f4767a30&elq=0ae71462b8cb459a9ed1ecf3be754a58&elqaid=50987&elqat=1&elqCampaignId=25571) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] Those were the recurring themes among the capital markets assumptions provided by major investment firms as 2023 wound down. I recently pulled them together into [a now-annual compendium](. In contrast with the major firms' [capital markets assumptions released toward the end of 2022]( when declining equity prices and higher interest rates buoyed the prospects for both stocks and bonds, the 2023 equity market rally diminished most firms' return assumptions for U.S. stocks. Meanwhile, last year's continued interest-rate hikes have contributed to higher forward-looking return prospects for bonds and cash. And firms' outlooks for non-U.S. stocks, a persistent bright spot in my annual compendium, continued to be more robust than their expectations for companies domiciled stateside, thanks largely to foreign stocks' valuation advantage. You might naturally dismiss forecasting in general, but I would argue that you need to plug in some kind of return expectation if you're engaging in financial planning. You could use the markets' historical returns, but forward-looking return assumptions that take into account current yields and valuations are a more sober way to go. I also have a few items for you to bookmark now that the year has kicked off. As usual, I've pulled together [a calendar and to-do list]( that you can use to keep your financial affairs in order, as well as [a 2024 tax fact sheet and calendar]( with current contribution limits for retirement accounts, tax dates, and so on. And in case you missed it, I also wrote about [what's changing on the retirement front for 2024](. One thing that's not changing anytime soon is people predicting the demise of the 60/40 portfolio—a plain-vanilla portfolio consisting of U.S. large caps and high-quality bonds. Amy Arnott recently wrote [a terrific piece]( about why we shouldn't be so quick to write off the 60/40 while acknowledging what some of its future challenges might be. Finally, one of my favorite projects is the podcast that Jeff Ptak and I do, The Long View. We recently put together “best of” compilation episodes for 2023. [One features guests in the realm of financial planning, retirement planning, and personal finance]( and [the other is all investment experts](. Give them a listen (or read the transcripts) and let me know what you think. With warm regards for the year ahead, Christine Benz [Experts Forecast Stock and Bond Returns: 2024 Edition]( Bond outlooks improve, but stocks’ prospects drop on the heels of 2023′s rally. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Experts Forecast Stock and Bond Returns: 2023 Edition]( Thanks to higher yields and lower equity valuations, return assumptions are the highest they’ve been in years. [Read More]( [Your 2024 Financial To-Do List]( As the new year dawns, here’s your plan to get financially fit, one job at a time. [Bookmark This]( [Your 2024 Tax Fact Sheet and Calendar]( Bookmark this guide to stay abreast of the tax-related dates and data that should be on your radar this year. [Read More]( [What’s Changing for Retirement in 2024?]( Inflation adjustments and the phase-in of Secure 2.0 provisions have implications for retirement savers and retirees alike. [Find Out More]( [Naysayers Were Wrong About the 60/40 Portfolio]( After a disastrous 2022, it turned out not to be dead after all. [Here’s Why]( [Best of The Long View 2023: Financial Planning and Retirement]( Some of our favorite clips from interviews with financial planners, advisors, and retirement researchers over the past year. [Listen Here]( [Best of The Long View: Investing]( Some of our favorite clips from interviews with portfolio managers and investment specialists in 2023. [Tune In Now]( 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](. © 2024 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602