Estimating Future Stock Returns, June 2019 Update | Value Investing News

Estimating Future Stock Returns, June 2019 Update

  • SInce the last article, the S&P 500 returned 8.8% on a price basis with around 3% of dividends over the 18 month period.
  • Using the ten scenarios from the past where the model was expecting returns between 2.39% and 4.39%, here’s what the results look like for the future on a probabilistic basis:
  • Not knowing what inflation or deflation will be like, it would be difficult to tell whether the bond or stock would be riskier, even if I expected 3.39% from each on average.
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