Stocks for the Long Term: Why Prospects Are Rosy
by Dale Domian and William Reichenstein
You already know the bad news: U.S. stocks as measured by the S&P 500 lost almost 50% from the October 2007 peak though November 18, 2008. Most foreign stock indexes were off by a little more than 50% this year.
The good news is that based on today’s depressed prices, long-term stock prospects appear above average.
In this article, we take a look at some of the evidence that supports a rosy multi-year stock outlook, and provide a framework for applying these forecasts.
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William Reichenstein , CFA, holds the Pat and Thomas R. Powers Chair in Investment Management at Baylor University and is head of research at Social Security Solutions, Inc .