The information in this email is not to be taken as a recommendation to invest in any certain way. Ginger Szala wrote “6 Economic Predictions for Next 5 Years: Northern Trust”, Sept. 10, 2018 as a result of interviewing Bob Browne the Chief Investment Officer of Northern Trust.)
Northern Trust has been shifting assets back in to the U.S. because “they have more confidence in the short-term U.S. story than in the international one.” Browne thinks the U.S. equities will return about 6.5% total return in the short- term and expect equities to return closer to 6% over the next 5 years. He predicts high-yield bonds at 6.3% total return in the short-term and 4.9% over the next five years.
In contrast, he projects 8.3% total return for emerging markets over the next 5 years.
He sees no risk of recession in the next 5 years and expects only one more interest rate increase from the Fed in 2018 and one in 2019.
While this obviously just represents the opinion of one institution, I thought you might be interested in seeing the total return predictions.
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®