Vanguard Warns of 2018 "Volatility": Translation 3-5% Gains

We have a new meaning of "volatile" today courtesy of Vanguard. Expect only 3-5% gains in 2018.

Here's a good one: Vanguard Warns More Volatility in 2018 May Hurt Equity Returns but expect positive returns anyway.

Vanguard Group, which manages $4.8 trillion, wants investors to take note: 2018 may not be great for your portfolio.

“While our global market outlook suggests a somewhat more challenging and volatile environment ahead, investors can continue to find potential for long-term success by lowering their return expectations,” Joseph Davis, Vanguard’s global chief economist, said in a press release.

The firm sees U.S. stock returns of 3 percent to 5 percent and 5.5 percent to 7.5 percent for non-U.S. equity markets.

Mercy! What a Catastrophic Prediction

I am curious. Does anyone know if Vanguard has ever predicted a decline?

Volatility Refresher Course

It seems that Vanguard has forgotten what volatility really looks like. I am glad to be of service.

For further discussion, please consider:

Mike "Mish" Shedlock

Comments (3)
No. 1-3

How is betting affected by a "sure thing"? I can't help but wonder how much the bears have contributed to the bull run. The constant criticisms (real enough) of the "market" create the doubt that supports volatility that underpins the "bet".


Its possible for markets to go down and volatility to remain constant. Not sure how when you create a traded security in volatility and everyone wants to go short, that you can find someone on the other side of the trade? Who is that person? What has happened in the markets is that we found that shorts actually propelled the market higher, by taking the other side of a long trade and getting squeezed, and that in the absence of an investor to take that punishment we had to create phantom shorts, so we could squeeze them.


On my latest posting in the planning I analyse those danfaangled corporations. They do not have upside potential. The only corporation with a long term future is Amazon