Tuesday, 29 March 2016

Hidden Factor That Could Crash The Stock Market

image:chart of percentage of companies profits against time
Source: St.Louis Federal Reserve - By Mark Hulbert, MarketWatch.

Chances are good that the U.S. stock market will be a disappointment over the next five years.

Here’s why: Shrinking profit margins will almost surely cause stock investors pain. Even under optimistic assumptions, it’s hard to see how those lower margins will allow the stock market to produce annualized returns from until now 2020 higher than in the low single-digits. Under more realistic assumptions, the market will do much worse. Full Article

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