|
Home
In Memoriam
From the Editor
John Kitchen and Ralph Monaco: Real-Time Forecasting in Practice
Jonathan McCarthy: Capital Overhangs
Henry Townsend: The Expected Rate of Return for Equities
Rolando F. Peláez: A Reassessment of the Purchasing Managers’ Index
Timotej Jagric: Forecasting
with Leading Economic Indicators—A
Neural Network Approach
A. Gary Shilling: Pension Profits Become Corporate Costs
Jack Kyser: The Los Angeles County Economic Development Corporation
Leslie G. Polgar: Flat Panel Displays
Robert P. Parker: December Will Bring Major Changes to the U.S. National Income
and Product Accounts
Book Reviews
|
The Expected Rate of Return for Equities
A Ten-Year and Thirty-Year Forecast
 Henry Townsend
Henry Townsend lives in
Washington, D.C. He has
worked for consulting companies,
the Federal government,
and himself. His academic
credentials include degrees
from Yale, the London School
of Economics, and the New
School for Social Research, as
well as the CFA.
In their defined benefit plans, most companies assume a
rate of return for the assets that accords with the historical
return on equities. By analyzing the sources of
return, however, it can be easily seen that a repetition of
that historical performance is improbable. A model is
presented of the total rate of return for equities, based
on the growth of per capita GDP. Forecasts of returns
over the next ten and thirty years are presented that are
much lower than those commonly assumed.
Read the article: HTML | PDF |
