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iM-Best Reports – 1/13/2025
Posted in pmp SPY-SH
Stocks Are Overvalued And 10-Year Forward Returns Look Poor: Update December 2024
- The average of S&P 500 for Dec-2024 was 6,011, (34% up from Jul-2023 average of 4,497 when forward returns for stocks “looked reasonably good” according to this analysis).
- The S&P 500 is now 2,135 points higher than the corresponding long-term trend value of 3,876.
- For the S&P 500 to reach the corresponding long-trend value would entail a 35% decline from the December average value, indicating that the S&P 500 is considerably overvalued.
- The Shiller CAPE-ratio is at 37.9, 42% higher than its 35-year moving average (MA35), currently at 26.7, forecasting a 10-year annualized real return of about 4.6% derived from the CAPE-MA35 methodology.
- The long-term trend indicates a forward 10-year annualized real return of only 2.0%
With reference to Section 202(a)(11)(D) of the Investment Advisers Act:
We are Engineers and not Investment Advisers,
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