Curb Your Expectations!

It took nearly 14-years just to break even and 18-years to generate just a 2.93% compounded annual rate of return since 2000. (If you back out dividends, it was virtually zero.) This is a far cry from the 6-8% annualized return assumptions promised to “buy and hold” investors.

But such a low rate of return should not have been surprising. What drives stock prices (long-term) is the value of what you pay today for a future share of the company’s earnings in the future. Simply put – “it’s valuations, stupid.”  

 

http://davidstockmanscontracorner.com/?p=177431&preview_id=177431&preview_nonce=f57a67f086&preview=true

 

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