Actually, they said it back in 2011. Here it is. Since then, the S&P 500 has risen 130% in price terms and by 162% with dividends. Here it is:
It’s not that we’re making fun of the Fed. We would never do that. But it shows that making stock market predictions can trip up even the sharpest and most objective minds.
The Fed made the reasonable argument that stock markets returns were driven by multiple expansion (basically more expensive) and that was driven by demography (a larger population buying stocks).
This is true but stocks are driven by many variables including the price of risk-free assets, earnings, demand, dividends, valuations, cash flow and about another 100 we could think of and more beyond that.
Right now, we think stocks are somewhat expensive but well supported by earnings and the synchronized growth in the U.S. and overseas. It’s enough to keep us confident.
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Please note that this discussion of our investments and investment strategy (including our research and investment process) represents our investments and investment strategy at the date of this commentary, and is subject to change without notice. We cannot assure that the type of investments discussed in this commentary will outperform any other investment strategy in the future, nor can we guarantee that such investments will present the best or an attractive risk-adjusted investment in the future. This is for general informational purposes only; references to an individual security should not be construed as a recommendation to buy or sell that security. The securities mentioned in this commentary are only several of the successful as well as unsuccessful investments by us, and do not represent all of the securities we have purchased, sold or recommended. Although we deem reliable the sources of the statistical and other information referred to in this commentary, we cannot guarantee the accuracy or completeness of any statements or numerical data. Past performance is no indication of future results.
All charts from Factset unless otherwise noted.