Vanguard, a major investment firm with $12 trillion in assets under management, released its annual report warning investors to prepare for AI-driven economic upsides and a potential stock market downturn. The report suggests a shift in portfolio mix for those near retirement age due to anticipated lower U.S. stock market returns.

Vanguard predicts a modest annualized return of 4-5% for the U.S. stock market in the next 5-10 years, significantly lower than the S&P 500’s past performance. This projection is influenced by concerns over large-cap tech stocks and a fear of over-valuation in the market, as indicated by the Buffett Indicator.

Amid concerns about lower U.S. stock market returns, Vanguard’s report highlights potential opportunities in non-U.S. equities, with forecasted annualized returns of 4.9-6.9% over the next decade. Recent performance in markets like Canada and Europe support the idea that diversifying investments could yield favorable results.

To navigate uncertain market conditions, investors may consider alternative assets like gold to protect their retirement funds from volatility. Opening a gold IRA through Thor Metals can provide tax advantages and a hedge against market dips, making it an attractive option for those seeking stability in their retirement portfolios.

For those focused on growing their wealth with less risk, high-yield accounts like the Wealthfront Cash Account offer competitive interest rates and easy access to cash. With a base variable APY of 3.25% and potential boosts for new clients, these accounts can be a reliable way to build savings and emergency funds during retirement.

Read more at Yahoo Finance: Vanguard’s 2026 outlook is here, and it’s raising alarm bells for retirees with US stocks. How to protect yourself