Not exact matches
Moderate interest rates were associated with a whole range
of subsequent
returns over the following
decade, and we know that those outcomes were 90 % correlated with the level
of valuations at the beginning
of those
periods (on reliable measures such as market cap / GDP, price / revenue, Tobin's Q, the margin - adjusted Shiller P / E, and others we've presented
over time - see Ockham's Razor and the Market Cycle).
And
over a
period of several
decades (we're talking about retirement after all), a single percent difference in your average investment
return because
of bank fees can add up to hundreds
of thousands
of dollars.
Equities — shares
of companies — have been shown by history to generate,
over periods of decades,
returns in the range
of inflation plus 6 % or 7 %; a
return of 7 % will double your purchasing power every 10 years.
Over the 15 - year
period ending in February 2018, encompassing the latter part
of Japan's so - called «lost
decades»
of stagnant equity
returns, the equal - weight index would have outperformed the cap - weighted Japanese equity benchmark by a stonking Read more -LSB-...]
A point I brought up
over at the Diehards is I didn't find a significant
period of time (like a few years to a
decade) where the Permanent Portfolio ever had a negative after - inflation
return.
On a cyclically adjusted earnings basis (where profits are averaged
over the prior
decade), the average cyclically adjusted P / E ratio following
periods of poor long - term
returns was 12.
In our view, your goal as an investor, particularly if you follow a conservative investing strategy like the one we recommend, is to make an attractive
return on your investments
over a
period of years or
decades, but with lower risk.
From these levels, it is very hard to conclude that the annualized US market
returns over the next
decade are likely to be anything better than single - digits, with a substantial possibility
of mid-single digit or worse annualized rate
of return over that
period.
Finally, his analysis implies that high equity exposures — even
over a
period of decades — do not materially enhance
returns.