After the Dotcom bubble, which began to implode in March 2000, the S&P 500 spent 13 years in stock-market hell on a rollercoaster to nowhere with two 50%-crashes in between. But money-printing starting in 2009 fixed that. In May 2013, the S&P 500 surpassed its March 2000 high in a sustained manner. Today, it’s up by 351% from the March 2000 high.
DYI Comment:
Will 2026 be the beginning of total stock market returns less than total market returns for long term investment grade corporate bonds?
As chief cook and bottle washer of this blog IMO it is an odds on favorite that over the next ten years Lt. investment grade corporate bonds will out perform the S&P 500. Plus it will have the added benefit of keeping one's money intact while waiting for stock market valuations to improve when once again stocks outperforming bonds.
WHY??
Simply put the S&P 500 dividend yield is a scant 1.14% as compared to VCLT - Long term investment grade corporate bonds yielding at 5.65%. Again IMO this is very advantageous for those who are dollar cost averaging into a yield that is 396% greater. Also the Shiller PE for the S&P 500 is at 40 times earnings that by any measure is nose bleed heights thus downside is far, far greater than any remaining PE expansion.
Even if 2026 ends up being a stellar year for stocks unless bond yields collapse the dollar cost averaging will eventually out compound stocks since the higher price will reduce even more the tiny dividend yield.
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