15min chapter

Two Quants and a Financial Planner | Bridging the Worlds of Investing and Financial Planning cover image

Practical Lessons from Michael Mauboussin

Two Quants and a Financial Planner | Bridging the Worlds of Investing and Financial Planning

CHAPTER

Navigating Expected Returns in Investing

This chapter explores the complexities of market expected returns and the importance of using ranges rather than single estimates for predictions. It emphasizes the value of probabilistic thinking and scenario planning, encouraging investors to consider various outcomes when assessing their portfolios. Additionally, it addresses the significance of historical data and the 'outside view' in making informed investment decisions, particularly regarding equity and bond markets.

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