The S&P 500’s SPX total return over the next decade will be 0.7 annualized percentage points below inflation.
That’s the implication of where the “Single Greatest Predictor of Future Stock Market Returns” currently stands. This indicator, introduced in 2013 by the anonymous author of the Philosophical Economics blog, is based on the average investor allocation to equities. The author claimed that it had a better record predicting the market’s 10-year return than any other valuation indicator of which he/she was aware. I have…
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