U.S. Markets close in 3 hrs 55 mins
  • S&P 500

    4,226.09
    +15.85 (+0.38%)
     
  • Dow 30

    33,473.99
    +164.48 (+0.49%)
     
  • Nasdaq

    12,855.94
    +1.14 (+0.01%)
     
  • Russell 2000

    1,981.41
    +12.16 (+0.62%)
     
  • Crude Oil

    93.35
    +1.42 (+1.54%)
     
  • Gold

    1,806.10
    -7.60 (-0.42%)
     
  • Silver

    20.33
    -0.41 (-1.96%)
     
  • EUR/USD

    1.0338
    +0.0036 (+0.3515%)
     
  • 10-Yr Bond

    2.8370
    +0.0510 (+1.83%)
     
  • Vix

    20.26
    +0.52 (+2.63%)
     
  • GBP/USD

    1.2224
    +0.0006 (+0.0526%)
     
  • USD/JPY

    132.6900
    -0.1830 (-0.1377%)
     
  • BTC-USD

    24,366.60
    +355.30 (+1.48%)
     
  • CMC Crypto 200

    575.70
    +0.96 (+0.17%)
     
  • FTSE 100

    7,465.91
    -41.20 (-0.55%)
     
  • Nikkei 225

    27,819.33
    -180.67 (-0.65%)
     

The stock market’s return will be minus 3.3% a year over the next decade, says this ‘single greatest predictor’

·4 min read
The stock market’s return will be minus 3.3% a year over the next decade, says this ‘single greatest predictor’

This month we’ve received both good and bad news from the “single greatest predictor of future stock market returns.” It is a contrarian indicator, with higher equity allocations associated with lower subsequent market returns, and vice versa. According to a simple econometric model I constructed that bases its predictions on the historical correlation between the indicator and the stock market, the S&P 500’s real total return over the next decade will be minus 3.3% annualized.