Markets and economy

Vanguard's outlook for 2022 and beyond

An intro to Tim Buckley’s webcast video on Vanguard’s global and economic outlook.
3 minute watch
  •  
April 14, 2022
Markets and economy
Market & economy insights
Vanguard news
Video
Forecasts
Inflation

Through market ups and downs, we’ve always encouraged our clients to stay the course, and with our updated economic outlook, our guidance will be no different.

Your approach to investing should be driven by your long-term goals, such as retirement. That means not letting the noise—investment trends, market valleys, etc.—affect your investment decisions. While we predict more modest market returns over the coming years, we know that maintaining perspective is key to investing for the long term and (eventually) enjoying the rewards of remaining disciplined.

Keep an eye out for our next video and article, where we’ll take a look at cryptocurrencies and meme stocks. See our previous video and article, which focus on ETFs (exchange-traded funds).

Invest for your future

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An intro to Tim Buckley’s webcast video on ETFs

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How do we view meme stocks and cryptocurrency?
An intro to Tim Buckley’s webcast video on cryptocurrencies and meme stocks.

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All investing is subject to risk, including the possible loss of the money you invest. 

Asset class return projections are based on Vanguard Capital Markets Model (VCMM) projections.

IMPORTANT: The projections and other information generated by the VCMM regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Distribution of return outcomes from the VCMM are derived from 10,000 simulations for each modeled asset class. Simulations are as of September 30, 2021. Results from the model may vary with each use and over time.

The VCMM projections are based on a statistical analysis of historical data. Future returns may behave differently from the historical patterns captured in the VCMM. More important, the VCMM may be underestimating extreme negative scenarios unobserved in the historical period on which the model estimation is based.  

The Vanguard Capital Markets Model® is a proprietary financial simulation tool developed and maintained by Vanguard’s primary investment research and advice teams. The model forecasts distributions of future returns for a wide array of broad asset classes. Those asset classes include U.S. and international equity markets, several maturities of the U.S. Treasury and corporate fixed income markets, international fixed income markets, U.S. money markets, commodities, and certain alternative investment strategies. The theoretical and empirical foundation for the Vanguard Capital Markets Model is that the returns of various asset classes reflect the compensation investors require for bearing different types of systematic risk (beta). At the core of the model are estimates of the dynamic statistical relationship between risk factors and asset returns, obtained from statistical analysis based on available monthly financial and economic data from as early as 1960. Using a system of estimated equations, the model then applies a Monte Carlo simulation method to project the estimated interrelationships among risk factors and asset classes as well as uncertainty and randomness over time. The model generates a large set of simulated outcomes for each asset class over several time horizons. Forecasts are obtained by computing measures of central tendency in these simulations. Results produced by the tool will vary with each use and over time. 

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