The Key Ingredient Needed For Future Returns

The Key Ingredient Needed For Future Returns by Richard Turnill – BlackRock

BlackRock Global Chief Investment Strategist Richard Turnill explains why this will be critical for generating U.S. stock market gains going forward.

Rising price-to-earnings multiples and increasing payouts to shareholders – dividends and share buybacks – have fueled U.S. stock market returns since 2009. But in today’s low-return environment, company earnings will be critical for generating gains.

My latest chart of the week helps explain why earnings growth is the key ingredient needed for future returns.

Future Returns

Companies have long been rewarded for returning capital to shareholders. Buybacks have shrunk share counts, contributing to rising multiples, while...