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PaperclipPerfector  27d ago (text post)   2397 thread views

Small-Scale Question Sunday for March 23, 2025

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So the word is that the S&P500 is going to return pretty low returns for the next 15-20 years due to excessive P/E ratios that’d show there isn’t enough earning being done to justify the valuations. People are saying expect annual returns of 4 percent or so. Can this really be true? I’m the kind of guy who just wants to invest in a simple ETF and forget about it. Until now I’ve chosen the SP500 for that, now wondering if I should be doing some rebalancing, but don’t want to sell during a downswing.

It's not just people talking. Vanguard forecast 2.9% - 4.9%.

Source (from last week)

for the next 15-20 years

Nobody knows what's going to happen in the next 5 years, let alone 15-20.

Would you expect anyone to predict the world we live in today from 5 years ago?

Now stock markets are all about prediction and so we have to make bets based on what we think will happen. But it seems extremely bold to make such a long-term prediction that nothing big will be discovered in the next 15 years, there'll be no epoch-shaking events! I also think big things in AI are imminent and being realized, 15-20 years is a very conservative timeline for transformative development on that front.

AI is going to destroy cataclysmic amounts of value in so many middlemen sectors (like almost all of SaaS) as productivity surges and the jobs market craters. Hard to pick winners or losers; capitalism itself might radically change or vanish entirely. I’ve purchased some land and a small place in a remote-ish corner of NW Europe where my spouse has some connections, have something somewhere random in the US, and a relatively conservative portfolio in the market (although my work and being an American abroad makes all but the most basic strategy almost impossible). Weird things are about to happen.

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