The bull market ahead: Why shares should make 6.7pc a year until 2025
Ignore the mayhem, several trusted measures of stock market valuation are telling long-term investors to buy
What do history and current valuations tell us about likely stock market returns over the next decade?
In recent weeks investors have experienced a roller-coaster ride, with share prices lurching back and forth. Dramatic movements, both up and down, have taken place amid fears over slowing growth in China, the world’s second-largest economy.
Even for seasoned investors the sharp falls, particularly since the FTSE 100’s peak on April 27, have been alarming. The index has fallen from 7104 to 6043, a 15pc decline
We have to expect violent movements from time to time. But what will happen to the market over the next few years? No one can say for certain, but certain valuation measures can be useful in estimating the expected long-term return of the stock market for those who buy at a particular level, such as today’s.
Research Affiliates, an American company specialising in long-term return predictions across various stocks markets and other assets, has compiled data for Telegraph Money for the UK stock market, forecasting annualised real returns (in other words, on top of inflation) in excess of 5pc over the next decade.
This suggests that UK shares are not expensive because they offer potentially better returns than those seen historically: 4.7pc since 1969.
Below we explain each of the three measures used in the research. All are used by fund managers daily to assess the value of shares when they are deciding whether to buy or sell.
Source: The bull market ahead: Why shares should make 6.7pc a year until 2025 - Telegraph
AtW's comment - why would somebody be giving such free investment advice which can cost people a lot of lost money, totally ruin their lifes???
Ignore the mayhem, several trusted measures of stock market valuation are telling long-term investors to buy
What do history and current valuations tell us about likely stock market returns over the next decade?
In recent weeks investors have experienced a roller-coaster ride, with share prices lurching back and forth. Dramatic movements, both up and down, have taken place amid fears over slowing growth in China, the world’s second-largest economy.
Even for seasoned investors the sharp falls, particularly since the FTSE 100’s peak on April 27, have been alarming. The index has fallen from 7104 to 6043, a 15pc decline
We have to expect violent movements from time to time. But what will happen to the market over the next few years? No one can say for certain, but certain valuation measures can be useful in estimating the expected long-term return of the stock market for those who buy at a particular level, such as today’s.
Research Affiliates, an American company specialising in long-term return predictions across various stocks markets and other assets, has compiled data for Telegraph Money for the UK stock market, forecasting annualised real returns (in other words, on top of inflation) in excess of 5pc over the next decade.
This suggests that UK shares are not expensive because they offer potentially better returns than those seen historically: 4.7pc since 1969.
Below we explain each of the three measures used in the research. All are used by fund managers daily to assess the value of shares when they are deciding whether to buy or sell.
Source: The bull market ahead: Why shares should make 6.7pc a year until 2025 - Telegraph
AtW's comment - why would somebody be giving such free investment advice which can cost people a lot of lost money, totally ruin their lifes???
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