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Stock Market Returns - What Are the Building Blocks of Stock Returns?
Stock returns are driven by three elements, the cash flow as represented by dividends. How that cash flow is growing overtime, how the dividends grow. And the third element is what our investors willing to pay for those earnings and dividends. The change in valuation can impact returns. These are the building blocks of stock returns,. ans how we go about coming up with reasonable assumptions for asi class returns on money for the rest of us.