The math comes courtesy of Jordan Brooks, a principal at AQR Capital Management. He analyzed drivers in the market that account for gains of almost 12% a year since 2013 versus inflation-adjusted rates on cash. And given stocks’ elevated starting point now, he concluded, generating even average returns is something of a long shot.
A monster 10 years for US stocks has showered money on the buy-and-hold faithful and made virtually every other asset class an also-ran.
So great have the gains been that some fairly simple math shows that however roaring the 2020s turn out to be, reprising the last decade’s bounty will take near-miracle expansions in earnings and valuations.
