S&P 5,300, Bear Market ‘Signposts’ And The Persistence Of The ‘Exceptional’
"Change makes for a more interesting story, and although we see real evidence for meaningful shifts, low rates, low growth and hyper-accommodative monetary policy lasted longer than expected and could easily extend another year or two", BofA's Savita Subramanian and Jill Carey Hall write, in the bank's official 2020 US equity outlook.
That latter bit (about slow-flation and the persistence of ultra-accommodative policy "lasting longer than expected") is something of an understatement.
Indeed,
About 5% over the next 10 years? Add almost 2% dividend = 7% or am I missing something.
From 2004 to 2018, SP500 sales/share grew about 4%/yr. That is pretty close to US nominal GDP growth over the period. SP500 net margin rose from 8.4% to 10.9%, with the tax cuts adding about 100bp to get us to that 2018 record level. That resulted in about 6%/yr earnings/share growth. Note this is per share, so already includes the impact of share buybacks. Over that period, the SP500 price has grown by about 7%/yr.