- Analysts predict that the S&P 500 will increase in price by 10% over the next 12 months.
- The average investor expects an income of 9.1% from their holdings.
- The actual stock market yield is far lower, to the tune of 3.8%
Analysts routinely overestimate the market’s performance. Are you holding your portfolio to unrealistic expectations?
How much income do you expect of your portfolio? If your answer is 11% or more, you’re not alone. That response mirrors a poll of U.S. investors by Schroders, a global asset management firm.
In its recent Global Investment Study, a survey of 20,000 investors in 28 countries, the company found the average investor expects an income of 9.1% from their holdings.
What’s the actual current stock market yield? A sobering 3.8%.
Where are investors getting these outlandish ideas regarding investment yields?
Recent research from FactSet gives a hint: Financial analysts and strategists who continually overestimate the market’s performance.
This trend is worth a closer look…