Good analysis on next 10 year returns

Investing Strategies Mechanical Investing
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New Feature: 10-Year Stock Market Return Forecast - Allocate Smartly has good analysis of next 10 year estimated S&P returns using various past data strategies

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allocatesmartly lists 4.9% for CAPE predicted 10 year stock market annual return. This is close to:

1/CAPE = 1/30.4 = 3.3% real projected
3.3% + 2.3% inflation = 5.6% projected return
( see Message: MI Board Search )

Meanwhile, TIPS are yielding above 2% real. Could go as high as 2.7% real.

TIPS yield 5-year, 10-year, 30-year

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depressing!

| laffisloon
August 17 |

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allocatesmartly lists 4.9% for CAPE predicted 10 year stock market annual return. This is close to:

1/CAPE = 1/30.4 = 3.3% real projected
3.3% + 2.3% inflation = 5.6% projected return
( see Message: MI Board Search )

Meanwhile, TIPS are yielding above 2% real. Could go as high as 2.7% real.

TIPS yield 5-year, 10-year, 30-year

fred.stlouisfed.org

Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted…

Graph and download economic data for Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed from 2003-01-02 to 2023-08-15 about TIPS, 30-year, maturity, securities, Treasury, interest…

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It could be similar to 2001 when CAPE was around 30. Maybe a rotation into small cap stocks in search of more return. Would need an accounting scandal in the Large Caps to push the herd.

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M* is projecting 4.8% forward-looking 10-year annualized return for the U.S. equity market. 9.3% Europe, 7.8% EAFE, 10.9% EM.

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Still depressing.
Sad that when future returns look so weak it isn’t causing more interest in mechanical strategies to beat it.
Since we unlike big boys can buy small caps that arena seems most likely to be able to do latter.

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