Vanguard lowers stock return forecasts again in July 2026

@thewarrior71

Vanguard lowered their stock return forecasts again in July 2026 — One month ago, I asked about why Vanguard's stock return forecasts were so low, especially for US stocks. Many said it was because high valuations mean low expected returns. https://www.reddit.com/r/Bogleheads/comments/1uoipd2/why_is_vanguards_forecast_for_us_equities_so_low/ Since then, Vanguard lowered their stock return forecasts again on July 22: https://corporate.vanguard.com/content/corporatesite/us/en/corp/vemo/vemo-return-forecasts.html US stocks are now 0.4-1% above US bonds, and 4-5% below their 125-year return of 9.84%. Asset class 10-year return 10-year forecast 30-year return 30-year forecast US stocks 14.85% 5.2% 10.65% 5.7% Ex-US stocks 9.63% 4.9% 6.20% 6.9% US bonds 1.41% 4.8% 4.15% 4.7% Ex-US bonds 1.53% 5.0% N/A 4.3% Vanguard wrote their market perspectives on July 29 here: https://advisors.vanguard.com/insights/article/series/market-perspectives Questions: What are your thoughts on Vanguard's updated forecast? Do you think the forecasted returns are realistic or too conservative? Does this impact your investing and asset allocation decisions? For financial planning assumptions, are you assuming 10% returns (historical return of US stocks), 5% returns (Vanguard's forecast), or somewhere in between? If you have an asset allocation of 100% stocks (especially heavy in US stocks) and 0% bonds, do you still think that bonds are unnecessary?

@thewarrior71

Right, in my previous post, I found that the worst 30-year period for US stocks was 7.37%, for a lump-sum investment made at the 1929 market peak before the Great Depression and held until 1959. Since then, Vanguard lowered their 30-year forecast from 6% to 5.7%.

@HopeHumilityLove

I think Vanguard's assumptions are helpful to ground one's expectations. If someone's expecting 10% returns and saving accordingly, they're not saving enough.