Where To?

My Guess of Hussman's Guess

Hussman Replies

-4.8% annually for 10 years.

Max drawdown -65%.

If I interpret Hussman accurately, I come up with this.

Future Value at -4.8% for 10 Years

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MoneyChimp has a nice Compound Interest Rate Calculator.

It allows negative interest rates. Most don't despite the huge amount of negative-yielding bonds.

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Looking Back

My Guess

I do not have a guess as to where we will be 10 years from now but I do expect something on the order of a 65% drawdown between now and then, with some sort of rebound then in play, perhaps no higher than we are now.

US Large Caps

Let's assume the GMO 7-Year Forecast is correct and someone lost 4.4% every year for seven straight years.

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That is amazingly tame compared to what some of us think.

Yet, it would crucify pension plans assuming 7% annual gains.

Mike "Mish" Shedlock

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