PIMCO: Forecasting Equity Returns in the New Normal

​Equities as an asset class are a necessary component of long-term portfolios, and unique in their ability to provide significant upside over time through careful allocation changes based on a framework of return forecasting.

Under our baseline assumptions, we forecast the broad U.S. equity market to produce nominal annualized total returns in the +4.0% to +5.1% compounded per annum range over the next five to 10 years.

Patience, diligence and the careful avoidance of downside risks can greatly enhance the experience asset allocation portfolios can achieve from this volatile but infinitely interesting asset class.