Reasons 83 and 84 To Expect Greater Stock Market Returns
The law of supply and demand
No, I haven't written about 82 previous reasons why stocks will offer solid returns for the foreseeable future. But I have written about enough reasons to lose count.
When I wrote “Why You Should Expect More Than 8% a Year From Stocks” I showed how the S&P 500 returned 11.56% the previous decade. And why this trend can continue. There were a variety of reasons then that are still relevant and new reasons have developed to propel the market to above-average returns in coming years.
Some of these reasons include low interest rates, lack of high yielding alternative investments, and large amounts of government spending, among other things.
There are two more reasons why the stock market can produce returns greater than 8% a year. And both are tied to one of the oldest business concepts: supply and demand.
So without further ado,
- Reason 83 — the increase in corporate buybacks and share repurchases
- Reason 84 — the decrease in publicly listed US companies
Supply and Demand
Supply and demand are two of the first principles they teach in Econ 101. And for good reason; they are essential theories…
