Vanguard Tempers Expectations for Stock Market in Next 10 Years

The stock market has been outperforming for the past decade following the financial crisis, but according to Vanguard’s chief investment officer, Greg Davis, don’t expect history to repeat itself for the next 10 years.

“If we look forward for the next 10 years, our expectations around U.S. equity markets is for about a 5 percent median annualized return,” said Davis. “Five years ago, we’d have been somewhere in around 8 percent.”

“Our expectations have clearly come down,” Davis added.

Historically, the stock market has been able to average an inflation-adjusted annualized return of close to 7 percent.

The comments by Davis come as The Inside ETFs conference in Hollywood, Florida is underway. Over 2,300 financial advisors, institutional investors, hedge funds, and more are discussing the latest and greatest in the ever-growing exchange-traded fund space.

Related: The Probability of Another 20%+ Drawdown is Higher Than You Might Expect

Investors Focusing on Price

As the ETF industry’s thought leaders gathered during the second day of the conference, the Dow Jones Industrial Average closed down about 50 points, while the S&P 500 and Nasdaq Composite posted paltry gains. Inside the conference, one key trend identified is investors’ fixation on price.