Investors’ Expectations Of Reasonable Returns May Have Broken From Reality

Investors’ Expectations Of Reasonable Returns May Have Broken From Reality
Andrew Rummer

over 2 years ago1 min

Individual investors’ expectations of the returns they’re likely to achieve keep growing and growing and have definitively broken from what financial professionals think is reasonable, according to a survey from French investment bank Natixis

Investors expect their money to grow by 13% above the rate of inflation in 2021, up from 8.9% in 2014, the survey of more than 8,000 people from 24 countries shows. Over the long term, they forecast even greater returns of 14.5% above inflation – nearly triple the 5.3% figure that financial professionals polled by Natixis say is realistic. 

This steady ratcheting up of expectations over the past few years – despite nothing fundamental changing about the mechanics of investing – suggests that many investors may be setting themselves up for disappointment. 

As Natixis puts it, “many may not be prepared to withstand the risk exposure they’ll have to assume in order to live up to expectations.”

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