“Are We Facing a Lost Decade for the S&P 500? | Christopher Bloomstran”
SPY cannot deliver a 10.5% return in a rational economy due to high valuations requiring unsustainable margin or multiple expansion.
I thought we peaked in 2021, which seemed entirely accurate when the S&P 500 fell by 18 or 19% and the Nasdaq by 35%, but we bounced back with two consecutive 25% growth rates.
In 2021, you had a 10-year period in which the S&P 500 index had made gains of 16.6%. It witnessed an explosion in profit margins and valuation multiples. There wasn't much revenue growth, but the market was trading at 22.8 times a record profit margin of 13.3%.