29 Oct 2021
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The Vanguard Capital Markets Model (VCMM) is a financial simulator developed to take into account current macroeconomic conditions, equity and bond valuations to forecast distributions of future returns for a wide range of asset classes.
The projections generated by the VCMM regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Distribution of return outcomes from the VCMM are derived from 10,000 simulations for each modelled asset class in AUD.
What caught our attention in the current quarterly Asset Allocation Report is the significant pessimistic forecast of the likelyhood of a negative 10 year projected nominal return for both Australian listed companies and international listed companies.
Click for chart.
Our thinking, even given such market noise is to just remain invested according to your appetite for volatility and when fear and panic take hold, react by buying more quality assets at discounted prices.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.