What might stocks return over the next 10 years?
Starting valuations have a real say in long run returns. This tool starts from the earnings yield, which is roughly what stocks pay you if valuations stay where they are, and checks it against 35 years of data across 24 countries.
Starting valuation
The default of 34.6 blends the ten largest MSCI ACWI countries (88.9% of the index, rescaled to 100%) using Barclays CAPEs as of August 2026. A single country gets a wider range because country specific surprises don't diversify away, and volatility switches to 21%, about the average for one country in the data.
CAPEs are pre-filled with Barclays readings as of August 2026 and can be edited. The default is the ten largest MSCI ACWI countries (88.9% of the index) rescaled to 100%.
Assumptions
Higher volatility means more of the average return gets lost to compounding. A diversified global fund has historically run near 15%. Inflation is only used to convert the real estimate to nominal. The default is the 10 year breakeven rate of 2.36% on October 2, 2026 (FRED). Earnings growth adjusts for the fact that CAPE uses 10 years of past earnings, which trail today's earnings when profits are growing. The default is US real earnings growth from 1871 to 2023 in Shiller's data. Set it to 0 for the plain earnings yield.
Model
Earnings yield assumes valuations end where they start. The two fits use what actually happened after each starting CAPE, which includes the rise in valuations over the sample period. Treat the earnings yield as the base case and the fits as the more optimistic view.
Valuation vs. what came next
Each dot is one country in one year. It shows that country's CAPE at the time and the average real return its stocks earned over the next 10 years, in US dollars after US inflation. The dashed teal line is the growth adjusted earnings yield, shifted up by the volatility drag so it sits on the same average basis as the dots. Where the fitted line runs above it, history paid more than valuations alone would suggest. Tap or hover a dot for details.
How this tool works
Valuations matter
When stocks are expensive relative to their 10 year average earnings (a high CAPE) future returns have tended to be lower. But the US alone only gives you a few truly independent decades to learn from. So this tool learns from 24 countries at once.
Earnings yield vs. history
The earnings yield (1 divided by CAPE) is the return you'd expect if valuations end the decade where they started. The historical fits ran higher at high CAPEs because valuations rose across much of the sample. We lead with the earnings yield because it doesn't count on that happening again.
The range is wide for a reason
The range shows where 8 out of 10 outcomes landed in sample, so it assumes the past relationship holds. CAPE is a useful anchor. It is not a timing tool.
Data, method and caveats
Valuations: monthly CAPE by country from Barclays Historic CAPE Ratio by Country, December 1981 to August 2026.
Returns: US dollar total returns from the Kenneth French Data Library for the US and developed markets, and MSCI gross country indices from MSCI End of Day History for emerging markets and recent months. The French country portfolios are close to, but not identical to, the MSCI indices behind the Barclays CAPEs. Returns are converted to real terms with US CPI from FRED. October 2025 CPI was never published, so it is filled with the midpoint of September and November.
Earnings yield estimate: 1 divided by CAPE, scaled up by (1 + real earnings growth) to the power of 5.5. CAPE averages the last 10 years of real earnings, which centers about 5.5 years back, so in a growing economy it understates current earnings. The 1.9% default is the compound growth rate of US real earnings from 1871 to 2023 in Robert Shiller's data. Earnings yield is already a compounded return, so no volatility drag is subtracted. The range around it borrows the spread of outcomes from the global fit.
Historical fits: 6,878 monthly starting points from December 1981 to August 2016. The average annual real return over the next 10 years is regressed on the log of starting CAPE, pooled across countries. Standard errors are adjusted for overlapping windows and for markets moving together. Global fit R² 0.11. US only fit R² 0.63. The headline subtracts half the variance (volatility squared over 2) to convert an average return into a compounded return.
Blending: CAPEs are combined by averaging earnings yields (1/CAPE) and inverting. Averaging CAPEs directly overstates how expensive a mix is.
Caveats: CAPE explains only a modest share of 10 year outcomes across countries. The relationship was much weaker for starting points after 2000, and when the model is fit only on data available at the time it overpredicted returns in that period. Much of the evidence at very high CAPEs comes from Japan, which traded above a CAPE of 35 for most of 1985 to 2008. Pooled across countries, valuations ended roughly where they started, but US valuations rose over its sample, which flatters the US only model. Foreign returns are in US dollars, so currency swings are part of the history. The countries are the ones Barclays covers today, so markets that collapsed or dropped out are missing. Russia is excluded because its Barclays CAPE stops in February 2022. Both effects likely tilt results upward.
A return estimate is a starting point. Your plan should start with your liabilities.
Expected returns tell you what the market might pay. They don't tell you when you'll need the money. We build plans that match your assets to your actual spending timeline, so a rough decade for stocks doesn't have to become a rough decade for you.
For educational purposes only. This is an estimate based on historical relationships, not a forecast, a guarantee or a recommendation to buy or sell any security. Past performance does not guarantee future results. Discipline Funds is a DBA of Orcam Financial Group, LLC, an SEC-registered investment adviser. Registration does not imply a certain level of skill or training.