Tuesday, December 18, 2012

2013 Stock Market Return Estimate

As I mentioned in the Ohlson's blog, you must estimate the projected market return.

Note, it doesn't have to be 2013's projected return.  It could be the projected annual average over the next five years, if that is what would make sense to your financial analysis.

I used a projected return of 10%.

I found a couple of published projections from Vanguard and Gurufocus of 6-9% and 4.3% respectively.

A survey from the CFA institute is projecting better performance over last year for the U.S.

And from January 3 to December 14, the S&P 500 gained 12% (pretty good!). (Jan 3 opening of 1258.86 to 1413.58 closing on December 14).

So I'm just attempting to be conservative by landing somewhere in the middle.  Besides "TEN" is such a nice tidy number.  Far superior to say, 8.9%, which is ghastly or 11.25%, which is even worse.  So when in doubt, pick 10.  You heard it here first and I guarantee they'll never teach you that at either U of T or Harvard. 

No comments:

Post a Comment