S&P Returns

The usual enlightening chart from John Hussman showing clearly that the expected returns from equities over the next ten years are in the 2-4% per annum range. Given the S&P 500 yields about 2% this implies the S&P will be around its current level. How it gets there is another question. Yes it could rocket up another 25% easily but its likely to collapse thereafter. At the end of Jan I’ve moved my pension fund from 100% equities to 100% cash – I simply think the risk/reward in this market is very skewed to the downside.

 

 

I urge you to read the full article NOW

http://www.hussmanfunds.com/wmc/wmc140203.htm

 

 

Balanced Portfolios

For those of you who believe in mean reversion (I do) the following chart does not look promising in terms of future returns from here: