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The Single Greatest Predictor of Future Stock Market Returns
- danuker 4y agoIt makes sense that the higher the proportion of capital is invested in stocks, the less return there is in the long-term. But I find it hard to believe that the relationship is so precisely predictable. A website tracking it is here; looks like the R^2 is slightly lower than what the blog post shows, but it's still robust well after the post: https://financial-charts.effingapp.com/ https://financial-charts.effingapp.com/ Would it hold true in the future? Would the pricing not accelerate, and would the market not react more immediately if people were more aware of the relationship? On the other hand, perhaps the short-term reaction is included in the 10-year return.