Just as investors aren’t confined to the U.S. and Western Europe, they’re also not confined to this moment in time, and expected returns have been known to change dramatically. Consider that the earnings yield on U.S. stocks – as measured by the inverse of Robert Shiller’s well-known cyclically adjusted price-to-earnings ratio – was 3.6 percent in July 2007. It had more than doubled to 7.5 percent by March 2009.

There are many other examples. The earnings yield was 2.3 percent in August 2000 and then jumped to 4.7 percent by February 2003. And the earnings yield was 5.3 percent in January 1973 and ballooned to 12.1 percent by December 1974. Similar moves can be seen in other countries and in other types of investments.

These wild swings are a gift to you, Millennial Investors, when you're facing low expected returns. Very few investors are going to plunk all of their retirement savings into the market today. Instead, the vast majority will save and invest gradually over the course of a working lifetime.

So while savings invested in U.S. stocks (or U.S. or Western European bonds, for that matter) today may grow at a frustratingly low rate, just stay the course and keep saving, Millennial Investors, because over time those savings will inevitably benefit from a more fertile environment.  

To be sure, no amount of clever investing will ever take the place of dutifully saving for retirement. But if you broaden your view of what is an acceptable investment beyond the U.S. and Western Europe, Millennial Investors, and remain disciplined about investing regularly, I suspect that you'll blow right past McKinsey’s gloomy estimates.

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