According to an investor study from Natixis…
???? Investors expect annual returns to be 11.2%
???? 78% of these individuals list “Capital Preservation” as their top priority
There is a huge disconnect between what individual investors are expecting (11.2%) and risk tolerance. The long-term returns of a 100% stock (“Aggressive Growth”) profile tends to be less than 11.2% annually and historically long-term market returns have been approximately 7%.
What should an investor expect with “Capital Preservation” listed as their top priority? Certainly not 11.2%.
???? The more important question is what rate of return is required to make your plan work?
REMEMBER: Your goals determine your plan. Your plan determines your portfolio.
