You Can’t Retire on the Trump Bump

The S&P 500 has returned more than 11 percent since the election of President Trump on Nov. 8, adding a bit of renewed thrill to a bull market that’s already eight years old. Clearly, investors are feeling optimistic about the prospect for returns. But many companies that put individual investors’ money to work for the long run have been arguing for lower long-term expectations.

That’s not a judgment on Trump or his economic policies—it’s about equity valuations and fundamentals that were in place before the election. Last year, Horizon Actuarial Services LLC surveyed 35 investment advising companies about their working assumptions for returns. On average, they anticipated annual returns from U.S. large-company stocks of about 7 percent for the next decade. Not bad, but it may feel like a comedown: Since the market turned around in 2009, it’s churned out an annualized 17 percent return, according to S&P Dow Jones Indices. Since 1925, accounting for many cycles of bull and bear markets, stocks have returned about 10 percent annualized.