Is the Stock Market in Trouble? A Grim Warning From Goldman Sachs Shocks Wall Street.

The S&P 500 (SNPINDEX: ^GSPC) is synonymous with the U.S. stock market. The index returned 13% annually over the last decade, outperforming most other asset classes, including international stocks, fixed income, precious metals, and real estate. But Goldman Sachs recently shocked Wall Street with a grim warning: The S&P 500 may return just 3% annually over the next decade.That dire forecast is based on two observations: First, the index is highly concentrated in that the Magnificent Seven account for one-third of its weight. Analysts see that as problematic because "it is extremely difficult for any firm to maintain high levels of sales growth and profit margins over a sustained period of time."Second, the stock market's current valuation is stratospheric, at least according to one metric. The S&P 500 trades at a cyclically adjusted price-to-earnings (CAPE) ratio of 38, a reading that ranks in the 97th percentile since 1930. That means stocks have only been more expensive 3% of the time in the last 95 years.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool