Tuesday, January 21, 2025

10 year estimated average annual return NEGATIVE 2%!

 


Only after the speculative collapse

does the truth emerge.

There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present. Only after the speculative collapse does the truth emerge.

-John Kenneth Galbraith, A Short History of Financial Euphoria, 1990


On Friday December 6th, the U.S. stock market pushed to the most extreme level of valuation in U.S. history, based on the measures that we find best-correlated with actual subsequent 10-12 year S&P 500 total returns, as well as the depth of subsequent losses over the completion of market cycles across a century of data. That’s not a forecast. Rather, it’s a statement about current, measurable, observable market conditions.

John P. Hussman, Ph.D.



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