It is well known that markets have an outstanding record of reverting to their long-term averages despite occasional irrational behavior from time to time. One of the most popular measures of market value is the PE ratio. The price to earnings ratio of the SP500 currently stands at 15.3 or 31.6, depending on the use of trailing or forecast earnings. This represents a meager return of between 3.2% and 6.5% compared to a risk-free rate of 4.6% for 30-year US. Government bonds.
It therefore seems clear that the bear market is not over and that the best outcome one can hope for is several more years of single-digit returns in US markets....
