Stock Market Returns Are Not Great, They Are What They Are

Stock Market Returns Are Not Great, They Are What They Are

$DIA, $SPY, $QQQ

The experts say that stock market returns are likely to disappoint participants over the next 10 years.

Participants may see stock returns at about 4% before inflation, about 50%  the level factored into many financial plans, thus indicating it would take 2X as long to build the “Nest Egg” many seek.

This is based on an analysis of P/E (price-to-earnings) ratios, a common stock valuation metric, and dividend yields. Stock prices are based in large part on expectations of corporate earnings growth, not expected to be as strong in the future.

However, the experts argue against pulling out of the stock market entirely, as other asset classes could leave investors in even worse financial shape.

People do not have a cash option because the return on a money-market fund is 0.1%. The return on “Mattress Money” is Zero. So, investing it is a must.

The fact is that when investors are doing their financial planning and their IRAs or their 401(k)s, predicting a 7.5% or 8.5% return is Nuts. That is not going to happen.

Investors do not have better options than stocks. And not investing will guarantee no retirement plan. Not the goals of most families in America.

The stock market is what it is, savvy people understand this, learn about investing prudently and do it.

Wednesday US major market indexes finished on their highs: DJIA +198.09 at 17779.52, NAS 100 +65.55 at 5095.69, S&P 500 +24.46 at 2090.35

Volume: Trade was above with more than 960-M/shares changing hands on the NYSE

• NAS 100 +7.6% YTD
• S&P 500 +1.5% YTD
• DJIA -0.2% YTD
• Russell 2000 -2.1% YTD

Stay tuned…

HeffX-LTN

Paul Ebeling

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