RT Journal Article
SR Electronic
T1 Occam’s Razor Redux: <em>Establishing Reasonable Expectations for Financial Market Returns</em>
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 119
OP 134
DO 10.3905/jpm.2015.42.1.119
VO 42
IS 1
A1 John C. Bogle
A1 Michael W. Nolan
YR 2015
UL https://pm-research.com/content/42/1/119.abstract
AB Reasonable expectations for capital markets returns are the foundation on which all investment programs are built. The model used to develop these critical expectations does not need to be complex. Rather, inspired by Sir William of Occam’s Law of Parsimony, the authors review a model for developing reasonable expectations that was first articulated in a 1991 issue of The Journal of Portfolio Management. The model is simple and intuitive. The authors describe its effectiveness over the 25 years since the model was first applied and provide their view on reasonable expectations for stock and bond market returns in the decade ahead. They close by discussing the model’s implications for investors and the financial sector.TOPICS: Factor-based models, simulations