Financial Planning Assumptions


This guide is intended to provide Canadian financial planners with our best estimates of future asset
class returns and volatilities to produce financial projections for their clients. Throughout this document,
it is assumed that investors hold a broadly diversified portfolio of publicly traded Canadian fixed income
securities and global equity, the latter including both developed and emerging markets. These estimates
are valid uniquely in the context of an investor who purposely avoids concentration in one or a few securities or sectors.

Our investment horizon is 40 years. A comprehensive description of our methodology is also available. For users of the Naviplan financial planning software, key inputs are highlighted in blue. We have added an appendix to provide users of Naviplan with data presented in a more compatible format.

Table of Contents

  1. Introduction
  2. Expected Inflation
  3. Primary Residence
  4. Asset Class Expected Returns
  5. Expected Standard Deviations
  6. Expected Correlations
  7. Composition of Asset Class Returns
  8. Portfolio Expected Returns
  9. Appendix: Composition and Standard Deviation of Expected Returns

This report was written by the Research team at PWL Capital Inc. The ideas, opinions, and recommendations contained in this document are those of the authors and do not necessarily represent the views of PWL Capital Inc.