Quotes of the Day (or, perhaps, of the next decade)

Goldman hit the headlines last week with their not-so-wonderful 10-year outlook for US stocks:

"Goldman Sachs forecasts that over the next decade the S&P 500 will yield an annualized return of 3%..."

"Indicating a marked slowdown in growth, the 3% return forecast places future returns in the 7th percentile for 10-year returns since 1930."

Which jibes with our John Hussman quote from last week:

"In the available data since the 1980’s, the current price/forward operating P/E is associated with subsequent 10-year average S&P 500 nominal total returns between -2% to 3% annually."

And from yours truly in our weekend video commentary:

"The US, from a valuation standpoint, is probably the least compelling looking equity market in the world right here."

Now, not to say that such long-term forecasts are, by themselves, the stuff of sound theses, as a lot can happen in the world, in economies and in markets over a 10-year time horizon... That said, history suggests that the odds of extended above-inflation returns from equities are stacked against them, when coming from such historically-high valuations. 

And my closing comment (from the video): 

"Doing it right is not about stocks, it's not about bonds, it's not about gold, it's not about any one of those things... It's about a global macro view of all asset classes, assessing risk/reward setups and opportunities, and then allocating accordingly within that context."

I.e., not to worry, the next decade will deliver plenty of opportunities, just perhaps not where I suspect most folks have come to believe are the obvious places.