This week's letter is by Myles Zyblock, who is Chief Institutional Strategist & Director of Capital Markets Research at the Royal Bank of Canada. I have been reading Myles for a number of years, when he was first at another firm whose quality of work has dropped since he left.
Myles takes a look at what the next ten years might hold for investors in the equity markets. Using both PEs and an accounting based approach he concludes that investors will be very disappointed if they expect returns over the next ten years to be anywhere close to those of the late 1990's.
This is another example of research that supports my belief that we are in a secular bear market for the next 5-10 years and why I picked it for this week's Outside the Box.
John Mauldin, Editor
Outside the Box
Peering into the Next Ten Years: You Aren't Going to Like What You See
Investors who have held onto stocks since the October 2002 lows have been handsomely rewarded, as the S&P 500 and TSX have risen by 48% and 64% respectively. The important question for investors to ponder is whether this powerful bull market can last and, if so, for how long? History argues that rallies starting from low valuations…