Investor Expectations Are Outrageous

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By Tom Sedoric: Partner, Executive Managing Director and Wealth Manager and Casey Snyder: Partner, Senior Vice President and Wealth Manager at Steward Partners

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This is correct in the title. Investors’ expectations are outrageous. And, no, we’re not excluding anyone in particular. We are not troubled by this. We’re trying to reset a few sights here. Expected return on investment is out of control in today’s market, and it’s time to take a good hard look at your own expectations. really Is, or say what it is should Happen.


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We are certainly not here to curb your enthusiasm. We’re excited about the market’s high as the next investor, but, historically speaking, You cannot plan your financial future based on the blip on the investment radar.

count on us.

We’ve said it before, and we’ll say it again

70-90% of our customers keep telling us that they understand the message. We’ve been promoting this for a long time, but, we’re not sure you’ll feel it how distorted Return required on investment actually it isThat’s why we keep bringing it up.


The general rule of thumb is: Build a balance sheet that strives for a 6-8% ROI over the life of your investment portfolio. In today’s environment, and for many reasons, 4-5% may be more appropriate.

While you might be thinking, ‘sure, that sounds totally reasonable’ on the surface, the current global expectation sits at a staggering 14.5% Report prepared by Natixis, On the other end of that are the financial professionals, who all pointed out are predicting that the number will be closer to 5.3%, which sets the expected return on investment gap at 174%.

174%. Let that sink in for a moment.

To raise that bar even further and “localize” it further, in the United States, the expected ROI of an individual’s investment portfolio is 17.5%. There is a far more outrageous expectation than what we are seeing globally.


Curb your expected return on investment in terms of financial survival

Remember when you were taking driver’s ed class and the instructor had the brake pedal in the passenger seat? We are that instructor, and that’s where we pump said brakes.

We’re not trying to bubble over the feel-good vibes of other-worldly investment growth, but, we have to reset course and focus on the road here for a moment.

If you are banking on the expected 17.5% return on investment as a baseline for your financial future and you end up with 4-5%, you are doing yourself a serious harm, You don’t need to be a mathematician to crunch those numbers… Planning on a double-digit ROI to bankroll the expenses you’ll make during retirement isn’t careful planning at all. In fact, it is careless. Your model should assume a rate of return lower than what you are experiencing now.

Don’t get us wrong, we all love double-digit growth. who would not? All we are saying is, be careful. There is a valley for every peak.

Why is the expected return on investment numbers so skewed?


This is due to personal experience. overcome your personal bias Your investment strategy will help you achieve more realistic goals and Help you make more concrete plans for your future,

Many investors are looking at the last 10-12 years and consider it ideal. Historically, it has not been so. If you were 42 after the 1970s, you assumed the market would perform quite poorly and planned for that. But if you talk to a 42-year-old who is getting into money in 2021, the general financial expectations of this generation are far better, and, if we’re being honest, alarming. It is possible that the returns here may be consistent or exceed expectations, but this is highly unlikely, and it is certainly not a promise. Again, setting the stage for a 17.5% appreciation of its overall investment strategy is cause for precariousness.

In the United States, the top five concerns that can reduce sustained investment returns are:

  • Volatility and evaluation
  • tax hike
  • slow recovery
  • inflation
  • Political laxity


These are very real, mind-boggling concerns and thus help you understand that assuming a low overall expected return on investment, you can identify what you really need to save more proactively. Overall, it is a safe and smart model of savings.

Consider the financial fears that may hinder your personal investment strategy:

  • Large, unexpected expenses such as property maintenance
  • taxes
  • Health care costs that pop up as we age
  • maintaining a certain standard of living
  • Job security

Set realistic goals, celebrate unexpected victories

Listen, we are all investing in a long-term strategy with our clients. We, like the next investor, are keeping our fingers crossed for a roaring 20 here. But, we are here to tell you that it is better not to depend on it. Again, if you’re planning on 17.5% and you get 5% for floating the entirety of your model, you’re screwed. that’s just the way it is.


After a big meltdown, everyone always puts their arms in the air and says, ‘Wow, I didn’t see this coming…’ When things get so rich and perverse, no one knows the tipping point. When will it happen, and exactly when it is coming. Sometimes cigarette ashes are needed to burn the forest. It’s like dry, it’s delicate. Soak it until gettin’ good, but be careful. We are right now.

curb Your Enthusiasm. Everyone is expecting a strong ROI, but set your expected return on investment to something you can actually work with. Bank at 5%, and if you end up with 17.5%, we’ll pop a cork and celebrate with you as well. Heck, we’ll get another bottle.

Tom Sedoric is the wealth manager at Steward Partner’s Portsmouth, NH office. Although Tom Sedoric has compensated Forbes for displaying this advertisement on his website, the views expressed here are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates. It is not a solicitation nor is it intended to provide personally tailored investment advice. The strategies and/or investments referred to may not be suitable for all investors.


Securities and investment advisory services offered through Steward Partners Investment Solutions, LLC, Registered Broker/Dealer, Member FINRA/SIPC and SEC Registered Investment Advisor. Investment advisory services may also be offered through Steward Partners Investment Advisory, LLC, an SEC registered investment advisor Steward Partners Investment Solutions, LLC, Steward Partners Investment Advisory, LLC, and Steward Partners Global Advisory, LLC, which are affiliates and Are operated separately.

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