Capital Market Assumptions Disclosures
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Announcing a new quarterly market snapshot going out to our research subscribers with long-term expected return estimates for US and global equity markets, plus some other useful bits of information which are also hard to find.
If you’d like to receive it, you can sign up here – and yes, it’s free.
Stock Market Expected Returns as of Dec 31, 2024
| US Stock Market | Yield | 3 Month | 1 Year |
| Real Expected Return (PCAEY*) | 3.32% | -0.07% | -0.62% |
| Risk Premium (PCAEY – 10 Yr TIPS Real Yield) | 1.10% | -0.73% | -1.04% |
| Nominal Expected Return (PCAEY + Expected Inflation) | 5.66% | 0.05% | -0.51% |
| Non-US Stock Markets | Yield | 3 Month | 1 Year |
| Real Expected Return (PCAEY) | 7.74% | 0.54% | -0.30% |
| Risk Premium (PCAEY – 10 Yr TIPS Real Yield) | 5.51% | -0.12% | -0.71% |
| Nominal Expected Return (PCAEY + Expected Inflation) | 10.08% | 0.67% | -0.19% |
| All World Stock Market | Yield | 3 Month | 1 Year |
| Real Expected Return (PCAEY) | 4.89% | 0.04% | -0.70% |
| Risk Premium (PCAEY – 10 Yr TIPS Real Yield) | 2.66% | -0.62% | -1.11% |
| Nominal Expected Return (PCAEY + Expected Inflation) | 7.23% | 0.16% | -0.59% |
| Fixed Income | Yield | 3 Month | 1 Year |
| 10 Year TIPS Real Yield | 2.23% | 0.66% | 0.41% |
Learn more:
The Most Important Number Not in The Wall Street Journal
Introducing P-CAPE: Improving Our Favorite Estimator of Stock Market Returns
The content on this page is being provided as general market commentary and for educational purposes only. The presented figures and exhibits are assumptions and should not be relied upon as the basis for any investment decision or be taken or used out of its original context. The content does not constitute any form of investment advice, or any form of recommendation to buy or sell any securities or adopt any investment strategy mentioned herein, or any form of advertisement for Elm Wealth services or strategies. This content is intended only to provide observations and views of the author(s) at the time of writing, both of which are subject to change at any time without prior notice. The information contained in the commentaries is derived from sources deemed by Elm Wealth to be reliable, but its accuracy and completeness cannot be guaranteed. Any views regarding future prospects may or may not be realized. Past performance is no guarantee of future results.
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When it comes to investment strategy, we literally wrote the book. Or at least a book: The Missing Billionaires.
This new book, published by Wiley in 2023, offers a simple yet powerful framework for making important lifetime financial decisions in a systematic and rational way. Whether you’re young and building wealth, an entrepreneur invested heavily in your own business, or at a stage where your primary focus is investing and spending, The Missing Billionaires: A Guide to Better Financial Decisions can be a resource for thoughtful financial decision-making.