Long-Term Returns: A Reality Check for Pension Funds and Retirement Savings

Pension fund managers and retirement savers could face lower-than-assumed investment returns over the long term using realistic projections. The implications would be bigger pension liabilities for some defined-benefit pension plans, and a need to save more and work longer for individual savers, if they are to avoid a larger-than-expected drop in their retirement lifestyles. Editor's Note: If the professional pension fund managers are faced with low investment returns, then so do individual investors!

Prospectively, using information available as of February 2013, we predict long-term returns in the neighbourhood of 2.5 percent (0.5 percent real) on long-term bonds and of 6.9 percent (4.8 percent real) on stocks. For a balanced portfolio (50/50 split), we therefore expect a real return of 2.7 percent for the next decade.

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Market Indices, Asset & Risk Management Numbers: November 2013

Great summary of investment performance - monthly, quarter, Year to date and 1-year stats. Updated performance data: stocks, bonds, mixed portfolios, etc.

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