Wall Street’s Prediction Of A Lost Decade For US Stocks: What To Do If It Does Happen

Today’s Fastest Growing Company Might Surprise You

🚨 No, it's not the publicly traded tech giant you might expect… Meet $MODE, the disruptor turning phones into potential income generators.

Mode saw 32,481% revenue growth, ranking them the #1 software company on Deloitte’s 2023 fastest-growing companies list.

📲 They’re pioneering "Privatized Universal Basic Income" powered by technology — not government, and their EarnPhone, has already helped consumers earn over $325M!

Their pre-IPO offering is live at just $0.26/share – don’t miss it.

Invest Now

*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

🚀 Your Investing Journey Just Got Better: Premium Subscriptions Are Here! 🚀

It’s been 4 months since we launched our premium subscription plans at GuruFinance Insights, and the results have been phenomenal! Now, we’re making it even better for you to take your investing game to the next level. Whether you’re just starting out or you’re a seasoned trader, our updated plans are designed to give you the tools, insights, and support you need to succeed.

Here’s what you’ll get as a premium member:

• Exclusive Trading Strategies: Unlock proven methods to maximize your returns.

• In-Depth Research Analysis: Stay ahead with insights from the latest market trends.

• Ad-Free Experience: Focus on what matters most—your investments.

• Monthly AMA Sessions: Get your questions answered by top industry experts.

• Coding Tutorials: Learn how to automate your trading strategies like a pro.

• Masterclasses & One-on-One Consultations: Elevate your skills with personalized guidance.

Our three tailored plans—Starter Investor, Pro Trader, and Elite Investor—are designed to fit your unique needs and goals. Whether you’re looking for foundational tools or advanced strategies, we’ve got you covered.

Don’t wait any longer to transform your investment strategy. The last 4 months have shown just how powerful these tools can be—now it’s your turn to experience the difference.

👉 Explore Premium Plans Now

Recently, research analysts from Goldman Sachs, Vanguard, and JP Morgan wrote reports to clients painting a scary and terribly bleak picture for the future of the US stock market. Goldman Sachs predicted annualized average returns of just 3%, or 1% after inflation, for the next 10 years. Vanguard predicted 2.8%-4.8% while JP Morgan strategists saw 5% returns for the same period. Are they right? Is this cause for concern?

The U.S. stock market has been the main engine creating wealth for investors for as far back as 80 years ago, if not longer. My article here is a reaction to these reports but especially this one from Ian Salisbury published at Barron’s, which you can read here. While I don’t personally agree with such a scenario, it can happen, but most importantly, I will offer a very different solution to this problem, if such gloomy scenario does come to pass.

Switch to Solar and Save with EnergySage

Are you ready to take control of your energy bills and make a lasting impact on the environment? With EnergySage, switching to clean, affordable solar energy has never been easier. Whether you’re looking to save money, reduce your carbon footprint, or increase your home’s energy independence, EnergySage is here to guide you every step of the way.

EnergySage offers a simple and trusted marketplace where you can compare multiple solar installation quotes from top-rated local installers. Our free, unbiased Energy Advisors are available to help you understand your options and choose the best solution for your home and budget. You’ll have access to transparent information, ensuring you make informed decisions with confidence.

EnergySage users save ~20% on their solar installations compared to going it alone. Plus, our service is 100% free, with no hidden fees. Whether you're going solar to save on electricity, avoid utility rate hikes, or do your part for the planet, EnergySage is the most trusted way to start.

See how easy it is to go solar with EnergySage!

Get solar quotes

The studies leading up to such a conclusion are largely based on the fact that the market’s current valuation look extremely high in the historical perspective. See chart below. The S&P 500’s CAPE (Cyclically-Adjusted P/E Ratio) has reached 38, which puts it in the 97th percentile (data goes back to 1930).

That’s where I disagree with the pundits. Often, people like to see mean-reversion tendencies everywhere, even where there is not a single shred of technical evidence for it. While certain variables in financial markets do have mean-reversion properties, the majority don’t. For example, people who blindly follow the uber-simplistic “Buy the Dips, Sell the Rips” rule of thumb of investing for long-term success are implicitly assuming that stock prices must have mean-reversion properties. That’s a reason this crowd gets burned so easily. If you don’t believe it, just look at the S&P 500 price chart to figure out what mean it reverts to. I doubt you will find any. Therefore, if stock prices aren’t bound by mean-reversion, P/E ratios shouldn’t be either. The P in P/E stands for stock prices. Look, I’m not saying that extreme P/E readings won’t increase the likelihood of a turnaround in its trajectory. I believe it will, but it’s far from guaranteed and hard to pinpoint a target. Anything is possible, including persistent high or even low P/E ratios — it doesn’t have any rules to violate!

Solutions to counter low returns

The Barron’s article offers a few solutions around the problem, such as rotating from Mag 7 to small cap stocks, which are traded at significantly lower P/E ratios of 15 or 18. For passive index investors, the author suggests swapping the S&P 500 for the index that weights all 500 the same, which is essentially the same idea. Or, alternatively, look for alternatives in foreign markets, because they look “cheap”.

Honestly, I don’t like the proposed solutions because both the stated problem and its proposed solutions are based on the same wrong assumption about the P/E ratio mean-reversion properties explained above. Markets are unpredictable by nature and the best way to deal with unpredictability is a tool known as probability and statistics. Probabilities must be measured dynamically because they are changing all the time. That’s what I’ve learned over the decades working with many different markets (stocks, currencies, interest rates, etc.). In my experience, risk is the leading actor in the markets drama. You earn a return because you took risks for it. This is a completely different perspective from that taken by the author and the pundits. By actively measuring the market’s risks and probabilities, we can quickly adjust our stock positions instead of trying to make predictions about the future or judge prices (valuation). That’s exactly what the RISP 500 risk indicator does for our investors and why we have been earning the returns we had. See our daily-compounded performance table below investing in 8 strategies guided by the RISP 500 risk indicator every single day since 1/1/2022:

We believe that a much better idea to overcome low S&P 500 returns is by investing in leveraged ETFs guided by the RISP 500. Note how Strategies 3, 4, 6, and 7 delivered amplified returns from the S&P 500 and Nasdaq 100. I would never have invested in leveraged ETFs if I didn’t have the RISP 500 tool guiding me to avoid deep market corrections or crashes: it would have been too much risk to bear and a recipe to disaster. But the RISP 500 is a game changer. Look at the Max DD (Drawdown) and RoMaD columns in the table above. With the RISP 500, the risk is reduced for me to confidently invest in leveraged ETFs and earn much higher rates of return.

🧠 AI’s Next Breakout Stock Is Here!

Every year, 600M people get strep, but testing is slow.

This company’s AI-powered Strep A test delivers fast, reliable results to your phone.

Its stock is soaring, hitting a $120M market cap in weeks.

Learn About This Trending Stock

So, there you have it. Even if such a bleak low return scenario does materialize, rest assured: we do have solutions. Frankly, I find it really hard to trust even a prediction for the near future, which is highly subject to errors due to changing assumptions, etc., let alone a 10 year prediction… Let’s hope such a horrible scenario won’t take place, but even if it does, we know what can be done.