{"id":130464,"date":"2025-03-13T10:08:12","date_gmt":"2025-03-13T10:08:12","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/estimating-future-stock-returns-june-2023-update-the-aleph-blog\/"},"modified":"2025-03-13T10:08:12","modified_gmt":"2025-03-13T10:08:12","slug":"estimating-future-stock-returns-june-2023-update-the-aleph-blog","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=130464","title":{"rendered":"Estimating Future Stock Returns, June 2023 Update \u2013 The Aleph Blog"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>\t\t\t\t\t<!-- .entry-meta --><\/p>\n<p class=\"has-small-font-size\">Image Credit: Aleph Blog || Has the return on assets for public equities permanently risen? The return on bonds has risen for now.<\/p>\n<p>From the last piece: \u201cAt March 31st, 2023, the S&amp;P 500 was priced to return 2.41%\/year over the next ten years. Given the rally since then, that return has shrunk to 0.49%\/year. Currently the 10-year Treasury yields 3.76%. In investment grade corporates, you could earn more than 5% with considerably lower risk.\u201d<\/p>\n<p>There was an error in that statement, the return had only shrunk to 1.64%\/year.  A similar adjustment would have to be made to the second graph, which would look more like the graph below.<\/p>\n<p>At June 30th, 2023, the S&amp;P 500 was priced to return 1.65%\/year over the next ten years. Given the rally since then, that return has risen to 2.03%\/year. Currently the 10-year Treasury yields 4.29% [bond-equivalent yield, add 0.09% to annualize]. In investment grade corporates, you could earn around 6% with considerably lower risk.<\/p>\n<p>Here\u2019s my current outcomes graph:<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"920\" height=\"671\" src=\"https:\/\/alephblog.com\/wp-content\/uploads\/2023\/09\/ecphilosopher-data-2022-Q2_17855_image001.gif\" alt=\"\" class=\"wp-image-11573 lazyload\" srcset=\"https:\/\/alephblog.com\/wp-content\/uploads\/2023\/09\/ecphilosopher-data-2022-Q2_17855_image001.gif 920w, https:\/\/alephblog.com\/wp-content\/uploads\/2023\/09\/ecphilosopher-data-2022-Q2_17855_image001-768x560.gif 768w\" data-sizes=\"(max-width: 920px) 100vw, 920px\" style=\"--smush-placeholder-width: 920px; --smush-placeholder-aspect-ratio: 920\/671;\"\/><\/figure>\n<p class=\"has-small-font-size\">Image Credit: Aleph Blog || Upside capped, long left tail\u2026<\/p>\n<p>So, on average no price change for 10 years.  You just collect your dividends.<\/p>\n<p>There are several ways to get better outcomes from stocks.  First, go abroad, <a href=\"https:\/\/t.co\/3YcS4Utxca\" data-type=\"link\" data-id=\"https:\/\/t.co\/3YcS4Utxca\">there are much better values available in Europe, Japan<\/a>, and in the emerging markets that respect the rule of law.  Second, decouple from the high-tech growth stocks.  I\u2019m able to find a lot of stocks in the US with good balance sheets that are small-to-midcap that are cheap relative to growth prospects.  Away from the \u201ccool\u201d sectors of the market there are many large-cap stocks with reasonable prices relative to prospects.<\/p>\n<p>That\u2019s all for now.  I may blog more, I may not.  Business is taking up more of my time.  Watch your risks to keep your returns.<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Image Credit: Aleph Blog || Has the return on assets for public equities permanently risen? The return on bonds has risen for now. From the last piece: \u201cAt March 31st, 2023, the S&amp;P 500 was priced to return 2.41%\/year over the next ten years. Given the rally since then, that return has shrunk to 0.49%\/year. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":130465,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[17660,3767,24650,2481,6128,10970,3310,4238],"dealstore":[],"offerexpiration":[],"class_list":["post-130464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-aleph","tag-blog","tag-estimating","tag-future","tag-june","tag-returns","tag-stock","tag-update"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Estimating Future Stock Returns, June 2023 Update \u2013 The Aleph Blog - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=130464\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Estimating Future Stock Returns, June 2023 Update \u2013 The Aleph Blog - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Image Credit: Aleph Blog || Has the return on assets for public equities permanently risen? 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