We all believe that Stock Markets in Average yield about a real 7% p.a. But at the same time, real returns in the last 5, 10 years were significantly beyond this. CAPE ratios are fairly high.
At the same time, consensus (which I agree to) is that market timing doesnt work. It would be wrong to refer to past excessive returns and conclude it was time to sell / buy less. Still… we are quite a few percentage points beyond the 7% average line.
So the question is: What Share Price Returns (real in CHF) do you expect from your VT? Lets say over the next 20 years? As most of us here are in a wealth accumulation phase… different around: with what return do you calculate when doing your business cases by when you would reach your target figure? And Why do you take these percentages?
Reason why I ask is that I see things a bit different these days. Given the boom we had at the back of melting interest rates (which are bound to reverse); I would going forward expect maybe 5% of real returns pre Tax / 4.3% Real Returns post Tax only…
How do you see this?