Gregory Kolb, Perkins Chief Investment Officer, examines how dividends, earnings growth and multiple expansion influenced market performance over the past decade and what those trends might say about future equity returns.
- The extended bull market may lead investors to ask: “Will this last?”
- While we cannot predict the future, we can gain perspective by examining the three main components of the last decade’s returns.
- Given this context, we offer four strategies in the latest Perkins CIO Outlook for investors faced with the prospect of lower returns.
- 鉴于此背景，我们在最新的Perkins CIO展望中为面临低回报前景的投资者提供了四种策略。
Stein’s Law, a principle from the late Herbert Stein, chairman of the Council of Economic Advisers during the Nixon administration, states, “If something cannot go on forever, it will stop.” Mr. Stein’s words are a good reminder that knowing if and when to act is never easy.1
The idea seems relevant today in another context: the stock market, which has been booming. After realizing an 18% average annualized total return since the low in early March 2009 (i.e., the bottom of the Global Financial Crisis) through the end of April 2019, investors in the U.S. stock market may ask themselves: “Will this last?”
Unfortunately, there is no definitive answer to that question as we cannot predict the future. However, it is helpful to put the current market environment into perspective by examining the three main components of the returns the market has generated over the past decade:
- Dividends – The dividend yield for the S&P 500® Index briefly rose above 3% at the height of the crisis. As the bull market started, however, the yield quickly fell into a range of 2% to 2.5%. Today, it is closer to 2% on a forward-looking basis. Given the average payout ratio of 35% in the Index, dividends are perhaps the most solid building block of an expected forward-looking rate of return.
- 股息 - 在危机最严重的时候，标准普尔500指数的股息收益率短暂上涨至3％以上。然而，随着牛市开始，收益率迅速下跌至2％至2.5％的范围。今天，它接近2％。鉴于指数的平均派息比率为35％，股息可能是预期前瞻收益率中最坚实的基石。
- Earnings per Share (EPS) Growth – The consensus estimate for EPS for the S&P 500 over the next 12 months has soared from $68 to $177, a rate of 10% per year.2 But while corporate profits – the main driver of EPS – may continue to grow, a number of factors suggest that the rate of growth is likely to slow, perhaps significantly.
- 每股收益（EPS）增长 - 未来12个月标准普尔500指数的每股收益预测从68美元飙升至177美元，即每年10％的增长率。但企业利润 - 每股收益的主要驱动因素 - 可能继续增长，可能会显著放缓。
- Multiple Expansion – It wouldn’t be a proper bull market without significant multiple expansion, and recent experience does not disappoint in that regard. Seasoned investors recognize that valuation multiples fluctuate, and while there are good reasons for at least a portion of the increase realized during the bull market (e.g., low interest rates), this component could very well become a headwind in the future should anything go awry.
- 乘数扩张 - 如果没有显著的乘数扩张，这将不是一个牛市，最近的经验在这方面并没有令人失望。经验丰富的投资者认识到估值乘数是波动的，虽然有很好的理由在牛市中实现至少一部分增长（例如，低利率），但如果出现任何问题，这个组成部分很可能成为未来的逆风。
Whether the bull market ends with a bang or a whimper, it will eventually end. Tempting as it may be, this isn’t really a question of timing – the only time frame that matters for most savers is the long term.
无论牛市以砰砰还是呜咽结束，它最终都会结束。尽管很有诱惑力，但这并不是一个时间问题 - 对大多数储蓄者而言，唯一重要的时间框架是长期的。
Accepting that the future likely holds the prospect of lower returns than the recent past, what is an investor to do? The May 2019 Perkins CIO Outlook outlines four strategies that can help investors maintain discipline and become more defensive in their portfolios.
接受未来可能比最近过去的回报更低的前景，投资者应该做什么？ 2019年5月的Perkins CIO Outlook概述了四种策略，可以帮助投资者保持纪律，并在他们的投资组合中变得更加防守。