What investors need to know to put the $17 trillion bull market into perspective

Since the depths of the financial crisis, investors have seen the value of stocks balloon by $17 trillion or 213% - but is this remarkable bull run really that remarkable?

Since the depths of the financial crisis, American investors have experienced the value of their stocks balloon by $17 trillion as earnings rose 15-fold.

Doug Ramsey has a word for that: abysmal.

The chief investment officer of Leuthold Group LLC says profits within the Standard & Poor\’s 500 Index ought to be 32 per cent higher according to growth rates because the Great Depression. Exactly the same could also be said for stocks, where gains of 21 per cent a year since 2009 still leave a catalog of total return 8 per cent below a historical trend line calculated by Ned Davis Research since 1925.

The underperformance shows either a fundamental flaw throughout the economy or just how much is left to go in the bull market, based on whom you ask. To skeptics like Ramsey, $2 trillion of share buybacks and record-low rates of interest should have done more to raise corporate profits.


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