Expected returns are predictions that use analytics and historical data to inform investors about potential future earnings based on the risks they are taking. This concept is "forward-looking" because it represents the anticipated return investors expect to receive in the future as compensation for the risks they assume in the market. However, it is important to note that expected returns are not guaranteed. They serve as a tool to help investors determine whether an investment might yield a positive or negative average net income, setting reasonable expectations without accounting for risk. The concern with expected returns is that they do not account for risk, which means that while they provide a probability of profit based on historical data and future scenarios, they do not guarantee outcomes. This makes them a useful but imperfect tool for investors who need to consider both potential returns and associated risks when making investment decisions