Lisa Abramowicz of Bloomberg Gadfly has a thought provoking article today: Stop Fooling Yourself About 8% Easy Returns… Legg Mason surveyed 900 investors in the United States, whose average expected rate of return was 8.64% (non-retirees had even higher expectations, at 9.27%)… The current dividend yield of the S&P is 1.9%, investment grade bonds yield 2.5%, REITs yield 4.0%, emerging markets bonds yield 5.3% and high yield bonds yield 5.6%… Only one of two conclusions is possible after reading this survey: Either the public expects dramatically higher interest rates… Or the public is delusional about what they can earn in the market…
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