>>22410068>>22410140the following decade is unlikely to look like the prior
since WWII we have gone in cycles where we expand (leverage up), and then deleverage, either by crashes (00s) or inflation (70s)
one of the best broad gauges of the future market direction is everyone's overall allocation towards equities, see
https://fred.stlouisfed.org/graph/?g=qislately businesses, households, wall street, retail, etc. are collectively more overweight stocks than almost ever, with Q4 2024 being +1.59σ above the trendline
the only two times we were relatively more overweight were
>Q4 1999 through Q3 2000 (+1.80σ to 1.97σ)a blow off top that took the S&P500 ~13 years to permanently recover from
>Q4 1968 (+1.60σ)a peak followed by a ~14 year stagflation crab market
both are much worse in real terms
using the historical trends, this metric is predicting negative annualized nominal returns of -2.2% over the next decade
or phrased another way - the odds of the S&P500 being higher 10 years from now than today is only ~20%
given our recent -9% dip here those odds have probably gone up if you're buying today though, will need to wait for Q1 2025 data
