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Higher returns because of higher profits due to decreasing interest rates, and higher P/E due to decreasing interest rates. But it can't keep going like that i
by AnimalMuppet 2y ago
Higher returns because of higher profits due to decreasing interest rates, and higher P/E due to decreasing interest rates. But it can't keep going like that in the future, because interest rates have very little room to decrease further. Therefore stock prices cannot keep going according the trend we've seen in the last 40 years.
Makes sense to me. It was a really nice ride. Kind of a drag for the next generation, though.
I wonder if this explains some of the increasing inequality. Those who have stocks are getting outsized gains; those who don't, aren't. If so, then inequality may not continue growing the way it has been.