Optimism is as American as hot dogs and apple pie. Too much optimism, though, is about as good for you as eating a few dozen hot dogs and slices of pie.
In a recent survey of 750 U.S. individual investors, Natixis Investment Managers found these people expect to earn 17.3% this year, after inflation.
That might not sound like pie in the sky. The S&P 500 returned 18.4% last year, counting dividends, and is up 15.9% so far in 2021. Recent past returns always mold future expectations.
Over the long run, however, the people in the Natixis survey anticipate earning an average of 17.5% annually, after inflation—even higher than for this year. That’s up from the 10.9% long-term return they expected in 2019, the previous round of the survey.
It’s also more than twice the return on U.S. stocks since 1926, which has averaged 7.1% annually after inflation. It’s more than triple their 5.3% return over the same period after both inflation and taxes, according to Morningstar.