The assumptions on the long-term steady state values, or for a more familiar term, the long-term Capital Market Assumptions (CMAs), are required for economic growth, inflation, interest rates and the expected returns on financial assets. It is not hard to imagine that long-term CMAs are a very important ingredient of any investment decision-making framework. However, what sometimes seems to be forgotten, is that these long-term CMAs are very uncertain, even if they are used as inputs for a stochastic risk & return model. In our scenario approach, we therefore explicitly take this uncertainty about long-term CMAs into account.

In this paper, we discuss how we arrive at our long-term CMAs, how we take the uncertainty around these assumptions into account, and we illustrate its relevance for investment decision-making.

If you are interested in learning more about this topic, contact Hens Steehouwer here.

Download your copy

By submitting my contact information, I confirm that I have read the Ortec Finance Privacy statement, which explains how Ortec Finance collects, processes and shares my personal data. I consent to my data being processed with Ortec Finance's Privacy Policy. Ortec Finance can optimize my experience with the Ortec Finance brand.

We respect your privacy

Related Insights

Cookies help us improve your website experience.
By using our website, you agree to our use of cookies.