S&P 500 Best Case 4pc Ann Return Through 2021

John Hussman puts out this chart of stock valuation (as a percentage of gross value added) and the subsequent 12-year return for stocks. Currently, it forecasts a 12-year return of near 0 percent. If I extrapolate off the 2009 low, I get the S&P 500 at 2750 in 2021, an annualized gain of 4 percent for the next four years. That is the best case scenario. On his chart, the red line would defy history and float sideways and higher until it meets the 2009 peak figure, avoiding a correction or bear market in the interim.

Hussman: The Value of Dry Powder

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