If you have 401k assets, are a financial professional or individual investors looking to construct portfolios and not move monies very often, and looking to beat inflation over an extended period of time, the chart below is well worth being aware of.
So says Chris Kimble (blog.kimblechartingsolutions.com) in his latest post* entitled Long lasting bull markets start from here? Ave 10-year returns are 2%!
[The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Kimble goes on to say in further edited excerpts:
The chart below, created by Doug Short, reflects the average of four market valuation indicators over the past 100 years.
CLICK ON CHART TO ENLARGE
Q: How many long lasting bull markets have started from the current valuation level over the past 100 years?
A: So far, none.
Q: What is the average 10-year stock market return when valuations are at these levels?
CLICK ON CHART TO ENLARGE
Q: Do the above charts mean that the stock market can’t rally?
A: No, the market could rally for a long-time from here!
Q: Does that mean one should be bearish?
A: No, but….
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
(The articles posted on munKNEE.com deliberately present a diverse perspective on subjects discussed. Below are links, with introductory paragraphs, to a variety of related articles designed to help you become truly informed regarding both sides of the issues so that you can assess the merits of all points of view and come to your own conclusion.)
1. Yes, You Can Time the Market – Use These Trend Indicators
Remember, the trend is your friend and now you have an arsenal of such indicators to make an extensive and in-depth assessment of whether you should be buying or selling. If ever there was a “cut and save” investment advisory this article is it. Words: 1579 Read More
2. End of “Wall Street Party” Will Be a Catastrophe! Here’s Why
The markets are considerably, fantastically overbought and that whatever happens after this “Wall Street Party” is going to be a sort of catastrophe. Here’s why. Read More »
3. This Chart of the Dow Suggests “Bring on 2014 – We Ain’t Seen Nothin’ Yet!”
The Dow is up almost 28% but the chart below showing how it’s 12% annualized gain over the past 5-years compares with past bull markets suggest we are probably not at a top – that “We ain’t seen nothin’ yet!” Take a look. Read More »
4. Some Factors to Consider As To Whether the Market Will End UP or DOWN in 2014
What is the likely market return in the coming new year? This articles tries to answer that question by presenting technical and fundamental market factors that are influencing the market in the coming year. Some of these factors point to a positive market return this year while others point to negative influences. Let’s take a look. Read More »
5. Stock Market Bubble Going to Burst & Unleash Destructive Forces on Global Economy
The Fed has manufactured a parabolic move in the stock market…which is much more aggressive (and thus even more unsustainable) than witnessed at either the 2000 or 2007 stock market tops. Parabolas always collapse – there are never any exceptions – so when the pin finds this bubble it’s going to take down not only our stock market, but unleash a destructive force on the global economy. Read More »
6. Warren Buffett’s Favorite Valuation Metric Suggests Stock Market Is OVERvalued by 15%
Here’s some perspective on the potential value of the U.S. equity market using Warren Buffett’s favorite valuation metric – total stock market capitalization relative to GDP. Read More »
7. These Indicators Suggest Stock Market Returns Are “Too Good To Be True”
Current macro conditions indicate that we are in a sweet spot for equity returns…that global growth is continuing and there is little or no tail risk in the immediate future. It’s time to get long equities…but I have this nagging feeling that these market conditions are too good to be true. If you look, there are a number of technical and fundamental clouds on the horizon. Read More »
8. Don’t Be Scared “Stockless”! There’s No Fear Anymore – Anywhere!
There’s no fear anymore – anywhere – and I’m talking about the type of fear that overwhelms investors – and, in turn, the market. The surest indication of this can be found in the following chart. Read More »
9. Relax! Take Stock Market Bubble Warnings With a Grain of Salt – Here’s Why
Bubble predictions are headline-grabbing claims that are sure to attract reader/viewership and more than a few worried individuals who will be pushed to act but, like all forecasts, these bubble warnings should be taken with a grain of salt. Read More »
10. Stocks Will UNDERPERFORM Bonds Over Next 10 Year Period!
The stock market is likely to experience a 4-year overall market loss of -25%, followed by positive 9% average annual total returns for the S&P 500 over the subsequent 6-year period, which would compound to produce a 10-year total return averaging 2.3%. Read More »
11. These Charts Show That Any Fed Tapering WILL Cause Stock Markets to Collapse
Whenever the Fed has decided to reduce the extent of their purchases of “agency” debt products, the SP500 also declined in a dramatic way. [As such,]… it makes it extremely important to contemplate a “tapering” off in the rate of growth of Fed assets, or even an outright end to quantitative easing (QE). [Indeed, if you own stocks you may well want the Fed QEternity program to be just that – to eternity – in spite of the inflation that will surely follow.] Read More »
12. Grantham: No Market Bubble for a While – But It’s Coming!
I would think that we are probably in the slow build-up to something interesting – a badly overpriced market and bubble conditions. My personal guess is that the U.S. market, especially the non-blue chips, will work its way higher, perhaps by 20% to 30% in the next year or, more likely, two years, with the rest of the world including emerging market equities covering even more ground in at least a partial catch-up. Read More »
13. Bookmark This Article: The Stock Market Will Crash Within 6 Months!
Until recently, I have not used the term “stock market crash”. I do not take using this term lightly. It brings with it major repercussions. I am now breaking out this phrase because of the current state of the stock market. This stock market crash will occur within the next six months from today… The markets will fall within a combined day/few days a total of at least 20%. Bookmark this article. Read More »
14. These 2 Stock Market Metrics Make Me Feel Uneasy – What About You?
It’s been an amazing run in the stock market but…I start to feel a bit uneasy about things when I see all news reported as good news, because it either means the economy is getting better or more QE is coming. The fact, though, is that the market is just driving higher on what looks like sheer optimism of continued QE and little else. You can see this optimism in two indicators you’ll recognize. Read More »
15. 4 Clues That a Stock Market Collapse Is Coming
You might be well advised to keep your powder dry and your portfolio small – or even be tempted to sell everything and wait for the storm to blow over [given the 4 clues put forth in this article]. Read More »
16. Bernanke Has Created the Mother of ALL Stock Market Bubbles – Here’s Why
We have NEVER been this overextended above this line at any point in the last 20 years. Indeed, if you compare where the S&P 500 is relative to this line, we’re even MORE overbought that we were going into the 2007 peak at the top of the housing bubble. Read More »