Decisions With Clarity
A common challenge for index investors is that many indices are sold on past performance, and past performance is just that - in the past. When driving a car, you want to look ahead most of the time and keep an eye in the rear-view mirror occasionally, not the other way around.
That’s why The Index Standard® Forecasts present future expected returns in three ways: low, high, and their average, along with historical returns accompanied by benchmarks. Our forecasts are not necessarily indicative of future performance, which could differ materially, but they offer you a sensible glimpse of your expected returns, enabling you to make evidence-based decisions and asset allocations.
Methodology
The Index Standard’s 10-year forecasts start with first determining what drives returns for an index, like a DNA analysis. From there, we combine forward-looking “capital markets assumptions” from 30+ top financial institutions to establish market consensus expectations for returns and variability. We then add our knowledge of critical investment factors for given indices, filtering on more characteristics than many others in the industry. Finally, we run thousands of simulations to establish our projections, which include Conservative, Moderate and Strong 10-year forecast return expectations for the index.
Our 3-Step Process
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Obtain Capital Market Assumptions (Major Markets)
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Identify Critical Investment Factors
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Simulate and Forecast