What will the market do over the next 30 years? No one knows, of course. But don't be plagued by indecision. Half of all investors have no idea if their portfolio-growth assumptions are realistic; nearly half can't even venture a guess as to what the inflation rate may be purely for planning purposes, AARP found. Perhaps most alarming, AARP also found that more than half of financial advisers do not have a clear investment strategy that they can communicate to their clients. Look, let's keep it simple. Thirty-year periods are long enough to make assumptions about based on history, which is pretty encouraging. Looking at rolling 30-year periods since the Great Depression, the S&P 500 index of large-cap stocks has never produced less than an average annual gain of 9%, and in almost every instance the average annual gain was between 10% and 12%. Don't be a prisoner to the moment. Figure on average annual gains of 9% for stocks and you'll be fine. A mix of investment-grade bonds should return about 6% a year and inflation should run about 3% a year. If you've got a blended portfolio, plan on returns of 7% a year.
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