Sentences with phrase «nominal total return»

In any event, our view is that the 10 - year nominal total return on such conventional asset allocations is likely to be less than 2 % annually.

As a result, the most historically reliable valuation measures now suggest that the S&P 500 will experience a net loss over the coming decade, while including broader (if slightly less reliable) measures results in projected S&P 500 10 - year annual nominal total returns of about 1.4 % annually (see Ockham's Razor and the Market Cycle for the arithmetic behind these estimates).

When valuations have been near those historical norms, the S&P 500 has generally followed with average nominal total returns of about 10 % annually.

On that point, it's worth noting that we currently estimate a prospective 10 - year nominal total return for the S&P 500 of just 3.9 % annually.

They also warn that because of extended zero - interest policy by the Fed, security valuations have advanced to the point where prospective nominal total returns on a conventional portfolio mix are likely to average well below 2 % annually, with negative real returns, over the coming 12 - year period.

The red line (right scale) is the average annual nominal total return of the S&P 500 over the subsequent 12 - year period.

From a valuation standpoint, we estimate that the S&P 500 Index would have to fall to the 1000 level to bring prospective 10 - year nominal total returns toward their historical norm of about 10 % annually.

At longer horizons, the 6.3 % growth rate that we've assumed for nominal GDP over the coming years will begin to bail investors out given enough time, and as a result, our projection for 10 - year S&P 500 nominal total returns peeks its head up above zero, at about 2.4 % annually from current levels.

On Friday, our estimate of prospective 10 - year S&P nominal total returns set a new low for this cycle, falling below 2.2 % annually.

On that assumption, the corresponding 10 - year projection for nominal total returns in stocks would be -LSB-(1.0494) ^ 16 / (1.10) ^ 6] ^ (1/10)-1 = 2.0 %.

Based on the valuation measures most strongly correlated with actual subsequent total returns (and those correlations are near or above 90 %), we continue to estimate that the S&P 500 will achieve zero or negative nominal total returns over horizons of 8 years or less, and only about 2 % annually over the coming decade.

We subtract inflation from the T - note nominal total return to get the T - note real total return.

A plausible, and historically reliable estimate of 10 - year nominal total returns here works out to only 1.06 * (15/22.7) ^ -LRB-.10)-1 +.022 = 3.9 % annually, which is roughly the same estimate that we obtain from a much more robust set of fundamental measures and methods.

Of the 9.6 percent nominal total return earned by stocks over the past century, fully 9.5 percent has been contributed by investment return - 4.5 percent by dividend yields and 5 percent from earnings growth.

The red line shows the actual subsequent 6 - year S&P 500 nominal total return on an inverted scale.

At current market levels, our estimate for 12 - year S&P 500 average nominal total returns has collapsed to just 0.8 % annually.

The early weeks of 2015 are the first time in history that both 10 - year Treasury yields and our estimates of prospective 10 - year nominal total returns for the S&P 500 have both declined below 2 % annually.

The next chart shows the margin - adjusted CAPE on an inverted log scale (blue), along with actual subsequent S&P 500 average annual nominal total returns (red).

The Shiller P / E (S&P 500 divided by the 10 - year average of inflation - adjusted earnings) and Tobin's Q (market capitalization to net worth at replacement cost) have substantially better records, with the ratio of market capitalization to nominal GDP and the S&P 500 price / revenue ratio having the best records (having a correlation with actual subsequent S&P 500 10 - year nominal total returns of nearly 90 %).

As valuations rise, prospective future returns fall, and our 12 - year projection for S&P 500 nominal total returns has now dropped to just 1.4 % annually.

We've recently emphasized that our estimates for probable S&P 500 nominal total returns have now declined below zero on every horizon of 7 years and shorter.

We find that in market cycles across history, this new measure is better correlated (92 %) with actual subsequent S&P 500 nominal total returns than even the S&P 500 price / revenue ratio and market capitalization / nominal GDP.

Actual subsequent 12 - year S&P 500 nominal total returns are plotted in red (right scale).

On the basis of nominal total returns (including dividends), we estimate zero or negative returns for the S&P 500 on every horizon shorter than about 8 years.

On a 12 - year horizon, we project likely S&P 500 nominal total returns averaging close to zero, with the likelihood of an interim market loss on the order of 50 - 60 % over the completion of the current cycle.

We presently estimate a nominal total return on the S&P 500 averaging 4.1 % annually over the coming decade.

The chart below shows this relationship using market capitalization to corporate gross value added (blue, on an inverted log scale) versus actual subsequent 12 - year S&P 500 nominal total returns (red).

Indeed, because the level of interest rates at any point in time is highly correlated with the level of nominal economic growth over the preceding decade, the relationship between starting valuations and actual subsequent S&P 500 nominal total returns is nearly independent of interest rates.

On valuation measures most strongly correlated with actual subsequent S&P 500 nominal total returns, we presently expect negative total returns for the S&P 500 on a 10 - year horizon, and total returns averaging only about 1 % annually over the coming 12 - year period (chart).

Presently, the average estimate of prospective S&P 500 nominal total returns is just 3.6 % annually for the coming decade.

By our own estimates, we expect the nominal total return on the S&P 500 over the coming decade to average about 3.8 % annually, though with very broad cyclical fluctuations producing that overall result.

Right now, I do not have the relevant data (annual percentages of nominal total returns).

An investment in the S&P 500 Index at present levels is likely to achieve a nominal total return of about 4.4 % annually over the coming decade, and investors will have to tolerate a great deal of volatility in pursuit of that return.