Founded in 1975 and based in Valley Forge, PA The Vanguard Group has grown into a mutual fund giant with a loyal following. Known for rock bottom fees and investor focus the outfit offers over 200 funds and manages about $1.5 trillion.

Its ubiquity aside Vanguard like all firms has strengths and weaknesses. Economic research and investment outlook are two areas falling into the latter category.

In an attempt to branch out into prognostication – an area they’ve long avoided – they recently released their first “Economic and Capital Markets Outlook” addressing everything from inflation expectations over the next decade to expected returns from emerging-markets stocks. They caution their forecasts are long-term in nature and should not be relied upon as support for short-term trading strategies.

Some key points from the report are as follows:

  • chances of a double-dip recession are 20%
  • long-term inflation should run around 3%
  • long-term median returns for most fixed-income indexes should be below current benchmark yields
  • long-term median returns for global equity markets are near historical averages given current market valuations and the projected equity risk premium
  • there’s a 65% chance the S&P 500 will return between 4% and 16% over the next decade
  • there’s a 65% chance REITs will return between 0% and 12% annualized over the next decade

Those wishing to read the full report may find it here. (Link no longer exists.)