How advisors set return assumptions

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In this Talking Shop episode, I sit down with Rubin Miller for an unscripted conversation about why market forecasts fail, how advisors actually set return assumptions, and where investors most often misunderstand risk. We move freely from prediction season and capital market assumptions to investor behavior, bonds, and cash—focusing less on what markets will do next and more on how to build a plan you can stick with when narratives get loud.

Listen and learn:

► Why short-term market predictions distract from what really drives long-term outcomes

► How ranges and probabilities lead to better financial plans than point forecasts

► What most investors get wrong about bonds, cash, and "playing it safe"

► Why the biggest investing mistakes come from narratives, not numbers

Visit www.TheLongTermInvestor.com for show notes, free resources, and a place to submit questions.

[02:00] – Market Forecasting and "Prediction Season": Why One-Year Outlooks Mislead

[03:10] – Financial Planning Return Assumptions: Using Ranges and Probabilities (Not Point Estimates)

[06:41] – Portfolio Construction Basics: Stocks Are Stocks, Bonds Are Tools

[15:56] – Setting Investor Expectations: What Forecasts Can and Can't Do

[21:01] – Behavioral Finance in Real Time: Volatility vs the Narrative Investors Fear

[23:45] – Market Timing Bias: "I Knew This Would Happen" and Why It's Dangerous

[29:39] – Risk Management: Probability vs Magnitude (How Investors Blow Up a Good Plan)

[32:21] – Bond Strategy: Building a Portfolio You Can Stick With (Not the Highest Return)

[38:30] – Cash Management: Ultra-Short Bond Funds, HYSAs, and the 2022 Hangover

Editing and post-production work for this episode was provided by The Podcast Consultant (⁠https://thepodcastconsultant.com⁠)

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