My Worst Investment Ever Podcast ISMS 28: Stocks for the Long Run
Aug 1, 2023
14:50
Stocks for the Long Run
Click here to get the PDF with all charts and graphs
What long-term return do you expect for US stocks?
In Siegel’s “Stocks for the Long Run,” he tells us to expect a 5% LT real US stock market return
I became a finance teacher in Thailand in 1992
Then started as a financial analyst in 1993
Siegel’s book came out in 1994 and was one of the best references available at the time
US nominal returns
US real returns
More than 200 years of returns
95 years of returns
- Higher inflation and higher nominal stock market returns, but only slightly higher real returns
- Slightly lower real LT bond return, near zero ST bond return
Post WWII/Bretton Woods 75 years of high inflation
- Real stock returns up slightly
- Real LT bond returns down
- Real ST bond returns down to zero
- Gold outperformed ST bonds
The 21 years after the Dot Com bubble saw an unprecedented level of globalization
- Inflation was down, and real US stock returns also down
- Real US LT bond returns up
- Nominal ST bond collapse, and real returns turn neg.
- Gold beats all
Siegel’s advice
- Over the long-term, an investor has paid about 15x PE for about 6-7% after inflation US stock market return
- In the future, expect to pay about 20x PE for about 5% after inflation return
Click here to get the PDF with all charts and graphs
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals