The S&P 500 is up 19% for the year so far. Anchored against the long run average of stock market returns – somewhere in the 7-11% range – and you’d think we are due for a pullback. But anchored on the thought that we’ve barely managed a 2% compounded return since January 2000, and you’d say we have a lot of catching up to do. Both are true. Neither has anything to do with where stocks will trade in the future....
- 'Tis the gift to be simple, 'tis the gift to be free
- 'Tis the gift to come down where we ought to be,
- And when we find ourselves in the place just right,
- 'Twill be in the valley of love and delight.
-Simple Gifts, traditional Shaker melody
*ignoring autocorrelation, momentum, mean reversion, dependent vs independent trials....simple.