Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
Vanguard pioneered the concept of index fund investing, and currently has a whopping $11 trillion in assets under management. It’s a real heavyweight in the American stock market (1).
So when the company issues a report about the future of the stock market — it’s worth a closer look. In July, the company published a 10-year forecast for a wide range of asset classes, ranging from municipal bonds to mortgage-backed securities (2).
But it’s the forecast about stocks that should raise alarm bells for many U.S. retirees. Here’s a closer look at what the report suggests seniors can expect in the years ahead.
According to Vanguard, the U.S. stock market is expected to deliver an annualized return of between 3.3% to 5.3% over the next 10 years. That is considerably lower than the previous 10 years. Since 2015, the S&P 500 has delivered an annualized return of 15.26% (3).
In other words, Vanguard’s analysts believe future performance won’t be nearly as impressive as investors have experienced in recent years, barring a sharp drop during COVID.
The team’s forecast about so-called “growth stocks” is even worse. Vanguard expects an annualized return between 1.9% and 3.9% over the next 10 years. That’s uncomfortably close to the 4% withdrawal rate many retirees depend on to meet living expenses.
If you’re already retired or approaching retirement and your portfolio is overweight U.S. stocks, these forecasts should cause some concern. Fortunately, the report also highlights other asset classes that could perform better in the years ahead.
Trending: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)
Not all asset classes are facing a bleak decade. In fact, some could outperform. Vanguard’s forecast suggests that U.S. Treasury bonds could deliver annualized returns ranging from 3.8% to 4.8% over the next 10 years. That’s a better return rate than you could get with growth stocks, but with far less volatility and risk.
The firm also expects to see stock markets in developed countries outside the U.S. outperforming. Developed market equities, excluding American stocks, are expected to deliver 5.7% to 7.7% annualized by 2035.
There are already signs of this trend playing out. Canada’s benchmark stock index, the S&P/TSX Composite, has delivered a 23.9% return this year through mid-October. That’s higher than the S&P 500’s 13.8% return over the same period.
Similarly, UBS Group expects $1.4 trillion of capital to rotate from U.S. to European equities in the next five years (4).
This is where stock picking can become an especially attractive strategy for generating above-average returns. While it can require more work and dedication than simply investing in a broad-based index, there are plenty of high-grade tools out there to help with the process.
For instance, platforms like Moby can help make that process simpler and smoother. Moby offers you investment insights broken down into simple, easy-to-understand language — no jargon here.
Each week, Moby delivers one to three curated stock picks straight to you. Reports are written by a team of former hedge fund analysts and financial experts who spend hundreds of hours per week sifting through the latest financial news and data.
The best part? Moby’s picks have beaten the S&P 500’s returns by almost 12%, on average.
It’s worth taking any future prediction of the stock market, even the ones from trillion-dollar fund managers, with a grain of salt. It’s impossible to say if U.S. stocks will overshoot or undershoot Vanguard’s forecast.
Nevertheless, diversifying your portfolio to be less reliant on domestic stocks could be a good idea.
According to Alliance Bernstein’s analysis of Morningstar, U.S. investors hold just 15% of their portfolios in international stocks, which puts them at risk of “home bias” (5). If your portfolio is too domestic, consider adding some international stocks and bonds.
Or, you can look at alternative assets, such as gold.
Gold is a known hedge against stock market volatility, and can be a solid way to help protect your retirement funds from eroding in a recession. The precious yellow metal has also been on a historic bull run in 2025 and is currently hovering above $4,000 per ounce.
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which can combine the tax advantages of an IRA with the protective benefits of investing in gold. This could make them an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty or market dips.
To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.
It can also pay to make sure your hard-earned savings are being put to work in the background. Unlike investments, savings carry a much lower risk of losing their value.
So, getting a solid rate of return on your savings account is a less risky way to grow your wealth with greater reliability and stability.
For instance, a high-yield account such as the Wealthfront Cash Account can be a great place to grow your savings and emergency funds, offering both competitive interest rates and easy access to your cash when you need it.
A Wealthfront Cash Account can provide a base variable APY of 3.50%, but new clients can get a 0.65% boost over their first three months for a total APY of 4.15% provided by program banks on your uninvested cash. That’s over nine times the national deposit savings rate, according to the FDIC’s October report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.
Similarly, financial advisors often recommend being more conservative as you get older and closer to retirement. If you’re already retired and worried about the stock market, adding more stable fixed income alternatives — such as U.S. government bonds — to your portfolio could be a good idea. Speaking with a financial advisor about your specific retirement goals and financial circumstances can also be a good idea.
Vanguard isn’t just a world-leading asset manager. They also offer a wide variety of other financial services.
With Vanguard, you can connect with a personal advisor who can help assess how you’re doing so far and make sure you’ve got the right portfolio to meet your goals on time.
Vanguard’s hybrid advisory system combines advice from professional advisers and automated portfolio management to make sure your investments are working to achieve your financial goals.
All you have to do is fill out a brief questionnaire about your financial goals, and Vanguard’s advisors will help you set a tailored plan, and stick to it.
A well-diversified portfolio could help you stabilize your retirement regardless of the shifting dynamics of individual asset classes.
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Ascentium, an Asia-based business services platform backed by Hillhouse Investment, is acquiring Dezan Shira & Associates, a 33-year-old advisory firm...
