Over the next long period of time (Motley Fool* picks 50 yrs, John Bogle** picks 10 yrs) the real return on the stock markets is likely to be something like 5% (Bogle) to 5.5% (Motley Fool)
* http://www.fool.com/investing/general/2016/04/22/how-have-stocks-fared-the-last-50-years-youll-be-s.aspx
At the end of 1965, the Shiller CAPE stood at 23.6, and today it stands at 24.3. The historical average is 16.7.
So, using just this one measurement,
stocks are about as expensive today as they were 50 years ago. If the
next 50 years show returns in the same ballpark as the past 50 -- and
they are working off roughly the same valuation starting point -- then
investors will do acceptably if they're expecting returns in the area of
5.5% over that time period.
** http://www.cnbc.com/2016/04/26/jack-bogle-theres-no-stock-pickers-market.html
Amid earnings season Bogle warns that the market may see five percent
investment return, well below the norms over the next decade, but "it's
better than nothing and certainly no reason to get out of the market,"
he said.
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