UBS: Get used to low returns from equities
One of the big questions dominating equity markets today is whether or not equity markets will produce a lower return than the historical average going forward after the impressive gains since the end of the financial crisis.
Historically, the S&P 500 has returned an average 9% per annum for the past 100 years as a mix of earnings growth, and higher equity valuations have pulled the market up. However, post 2008 there is evidence that real growth has slowed down on a trend basis. Long-term expectations of inflation have also fallen globally. Nonetheless, equity valuations have remained resilient during this period.
