First off, “BofA/Merrill” is a really stupid name. Why don’t you pick one: Bank of America or Merrill? Second, when was the last time the market has gently glided higher for 16 years? Becaue that’s what BofA/Merrill is suggesting now, with their harebrained research note.
“Based on current valuations, a regression analysis suggests compounded annual returns of 8 percent over the next 10 years with a 90 percent confidence interval of 4-12 percent. While this is below the average returns of 10 percent over the last 50 years, asset allocation is a zero-sum game. Against a backdrop of slow growth and shrinking liquidity, 8 percent is compelling in our view. With a 2 percent dividend yield, we think the S&P 500 will reach 3500 over the next 10 years, implying annual price returns of 6 percent per year.”
Their regression analysis suggests, with 90% confidence, that you’re gonna be bored to pieces with this market, all the way out to the year 2025.If you enjoy the content at iBankCoin, please follow us on Twitter