Ok, fine, but what kind of investments will give you a secured 7% return over that period of time?
https://reason.org/data-visualization/public-pension-plans-n...
You may have noticed various pensions being bailed out by taxpayers - assume this will continue, although the rampant and excessive inflation is also alleviating this problem (to the detriment of beneficiaries).
- real-estate -?
- rent vs flipping
- mutual funds - 5-8% annual?
- stock market -10%-20% over 10 years?
- bank savings 2%?
Strategies ?
Diversification ?
What types of investments are you using to generate the perspective that 7% is rather optimistic?
US stocks have experienced stellar returns over the past 10 years that exceed growth in underlying earnings. Returns over the next 10 years will likely be lower as the stock market reverts to the mean. The cyclically-adjusted P/E ratio (CAPE ratio)—defined as current stock price divided by average annual earnings over the past decade—is a common way of looking at mean reversion. The relevant results can be found in Figure 5 (page 10) of a 2016 study by StarCapital Research [1] or Figure 1 of a 1996 study by Robert Shiller [2].
As of Fri Dec 3 2021 the CAPE ratio for the S&P 500 was ~38 [3].
[1]: https://mebfaber.com/wp-content/uploads/2016/02/Research_201...
Interest rate forecasting is a different beast entirely, but worth noting that we have not had "normal" interest rates for ~15 years (and then only for a couple of years), and Japan has not had "normal" rates for close to 30 years.
[1]: https://www.marketwatch.com/story/sky-high-stock-prices-make...