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Investors should expect the stock market to post far more modest returns — 2% to 4% annually — over the coming decade compared with recent years, Vanguard CEO Mortimer "Tim" Buckley and two top strategists said in an online event this month.

That's far below last year, when the S&P 500 rose nearly 28%.

"We were fortunate in terms of what the equity markets produced for the last decade," Greg Davis, chief investment officer, said. "It is unlikely that we will see the same type of returns going forward."

Vanguard's forecast for stock market gains is well below Wall Street consensus: a Reuters poll of strategists believe the S&P 500 would gain 7.5% in 2022 to finish at 4,910.

Policymakers will affect the recovery by how they go about removing support and stimulus packages enacted to combat the pandemic-driven downturn, the Vanguard executives said.

The tremendous amount of fiscal and monetary policy support in the marketplace has helped get the U.S. economy running again.

But the firm sees "more moderate economic growth both in the U.S. and Europe," Davis said. "We are expecting about 4% or so in terms of economic growth. Even places like China that have historically had gangbusters-type economic growth, we are expecting growth to slow down to around 5% or so."

Vanguard's forecast is higher than others: Goldman Sachs economists lowered their forecasts for 2022 U.S. gross domestic product growth to 2% in the first quarter from 3% previously, citing the failure to pass the federal Build Back Better bill.

Vanguard expects inflation to moderate over the next couple of years. "The market is pricing in 2.5% inflation for the next decade. That is in our wheelhouse of what we expect," Davis said.

Vanguard's muted expectations for investors extended to bonds. The Federal Reserve has signaled it will start increasing interest rates, and as a result "our return expectations for fixed income ratcheted up a small amount but we are expecting 1.5%-2.5% over the next decade for the broad-based fixed income category."

Sara Devereux, global head of fixed income at Vanguard, said she expected that bond returns outside the U.S. "will be a little lower than in the U.S. That said, we do find value in buying hedged global bonds because there is a diversification benefit. It helps insulate against results and risks specific to the U.S."

Asked about meme culture's effect on Wall Street and individual investors, Buckley urged ignoring the hype.

"You will probably run out of money before you can cash out on these trends. What do you do? You ignore them," he said.

Arvedlund writes for the Philadelphia Inquirer.