Vanguard, the second largest asset manager in the U.S., expects higher risks and lower returns in financial markets next year.
“We anticipate a bit more volatility and an uptick in inflation in the year ahead, accompanied by more muted equity returns,” said Joseph Davis, Vanguard’s chief economist and investment strategy group head, in a statement accompanying the firm’s 2018 market outlook.
In what it termed its “most subdued” market outlook in a decade, Vanguard forecast a 3% to 5% return in U.S. equities — down sharply from the 10% annualized rate over the past 30 years — and a 5.5% to 7.5% gain in foreign equities. Fixed income assets are expected to return 2% to 3%.
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Bernice Napach
Bernice Napach is a senior writer at ThinkAdvisor covering financial markets and asset managers, robo-advisors, college planning and retirement issues. She has worked at Yahoo Finance, Bloomberg TV, CNBC, Reuters, Investor's Business Daily and The Bond Buyer and has written articles for The New York Times, TheStreet.com, The Star-Ledger, The Record, Variety and Worth magazine. Bernice has a Bachelor of Science in Social Welfare from SUNY at Stony Brook.
