ISMS 28: Stocks for the Long Run

<h2>Stocks for the Long Run</h2><p><a href="https://myworstinvestmentever.com/getpdf/" rel="noopener noreferrer" target="_blank"><strong>Click here to get the PDF with all charts and graphs</strong></a></p><h2><strong>What long-term return do you expect for US stocks?</strong></h2><p>&nbsp;</p><blockquote class="ql-align-center"><strong>In Siegel’s “Stocks for the Long Run,” he tells us to expect a 5% LT real US stock market return</strong></blockquote><h3>&nbsp;</h3><h3><strong>I became a finance teacher in Thailand in 1992</strong></h3><h3><strong>Then started as a financial analyst in 1993</strong></h3><p><br></p><p><br></p><h3><strong>Siegel’s book came out in 1994 and was one of the best references available at the time</strong></h3><p><br></p><p><br></p><h3><strong>US nominal returns</strong></h3><p><br></p><p><br></p><h3><strong>US real returns</strong></h3><p><br></p><p><br></p><h3><strong>More than 200 years of returns</strong></h3><p><br></p><p><br></p><h3><strong>95 years of returns</strong></h3><p><br></p><p><br></p><ul><li>Higher inflation and higher nominal stock market returns, but only slightly higher real returns</li><li>Slightly lower real LT bond return, near zero ST bond return</li></ul><br/><h3><strong>Post WWII/Bretton Woods 75 years of high inflation</strong></h3><p><br></p><p><br></p><ul><li>Real stock returns up slightly</li><li>Real LT bond returns down</li><li>Real ST bond returns down to zero</li><li>Gold outperformed ST bonds</li></ul><br/><h3><strong>The 21 years after the Dot Com bubble saw an unprecedented level of globalization</strong></h3><p><br></p><p><br></p><ul><li>Inflation was down, and real US stock returns also down</li><li>Real US LT bond returns up</li><li>Nominal ST bond collapse, and real returns turn neg.</li><li>Gold beats all</li></ul><br/><h3><strong>Siegel’s advice</strong></h3><ul><li>Over the long-term, an investor has paid about 15x PE for about 6-7% after inflation US stock market return</li><li>In the future, expect to pay about 20x PE for about 5% after inf