The stock market will not continue to return the kind of annual earnings that investors have become accustomed to since the financial crisis in 2009, said Vanguard's chief investment officer, Greg Davis.
"Our expectations have clearly been reduced," Davis added. The historical average annual return of the stock market, which represents inflation, is around 7 percent.
The S & P 500, which has soared about 15 percent since closing on Christmas Eve, after three months of turmoil, is at the "highest level of fair value," Davis said in the Squawk Box. Inside ETF Conference in Hollywood, Florida. .
Davis sees that earnings growth is slowing to one-digit place this year, following last year's much stronger rate. Regarding the economy, which follows from what is expected to be a growth rate of around 3 percent by 2018, Davis believes that the gross domestic product of EE. UU It will increase around 2 percent this year.
With the slowdown in stock market performance as profits and economic growth cool, Davis said Americans will need to save more and save for longer.
Vanguard, the mutual fund giant founded in Valley Forge, Pennsylvania in 1975, has about $ 5.3 billion in global assets under management as of September 30, 2018.