The Importance of Predictability in Value Stocks

You estimated in the book that stocks would earn a 3.6% real return per year over the next three decades. That's going to be lower than it's ever been, but you used an important word in that question: century. At the beginning of the 20th century, stocks yielded 5%. Well, when the dividend yield of stocks falls from 5%, so 1.7%, you're going to get a nice juicy jump in your realized return. That is very unlikely to repeat itself.

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