Subject: Re: OT, markets rise
So the recent trend of rising net profit margins will end at some point and, even if they stay at their peak, profits would grow no faster than sales thereafter. S&P 500 real sales have risen 1.57%/year in the last 25 years and 2.48%/year in the last 15. You get dividends on top of those capital value growth rates, but since prices are so high the yields are low: 1.14% at the moment, and that's well above long term trends.

Sobering numbers.

If we call that 2% growth in real sales, plus 2% inflation, plus 1% divis, that's 5% / year total return (nominal). Some way off the 10%+ that many expect. And a rise in divi yield (i.e. fall in the indexes) could easily wipe out a few years of that 5%, say there's a 30% drop and that's no gain in 6 years.
Hmmm ... :-(

SA