Wharton finance professor Jeremy J. Siegel says that history provides evidence that stocks will remain a good long-term investment because they are down about 50% from their peak.
Studies do show that when stocks are off so much from their highs, future returns are usually better. That doesn't guarantee short term performance, or that the following year will be better, but improvement can be expected over time.
However, this longer view remains to be seen under present economic circumstances.
The role of inflation due to the tremendous budget deficit, plus higher and yet higher taxes, and the crowding out of private capital investment, can easily distort conventional securities market projections.
A further securities market advance will depend on corporate earnings growth. That can be problematical with government spending and borrowing scavenging the private need for capital.
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