By Brad Cornell
It is easy to lose perspective when things are going well and for stock things have been going well for quite some time. The chart table below gives the total returns on the S&P 500 for the years 2008 through the current point in 2015. Since the collapse in 2008, it has been up, up and away. From the end of 2008 onward, the S&P 500 has average a compound return of over 15% in an environment of little inflation and with short-term interest rates close to zero. But the continued rise stretches valuation thinner and thinner. Stocks clearly cannot go on performing as they have relative to interest rates and inflation forever. The question is when will stop, or even reverse. If I had a good idea I would be trading rather than writing this blog. (Well to be fair I am trading, but cautiously.) Although I can’t predict the future with any accuracy, in my view a warning is in order.
| S&P 500 Total Return | |
| 2008 | -37.00% |
| 2009 | 26.46% |
| 2010 | 15.06% |
| 2011 | 2.11% |
| 2012 | 16.00% |
| 2013 | 32.39% |
| 2014 | 13.69% |
| 2015 | 2.65% |
