A historical metric often used to assess the future performance of the S&P 500 is the so-called CAPE ratio (Cyclically Adjusted Price Earnings Ratio). This measures the price-earnings ratio over a longer period and provides indications of whether the market is overvalued or undervalued.
Current Market Development and Its Influence
Current data shows that with a high initial level of CAPE, the overall return of the S&P 500 tends to be disappointing over the next ten years. A very high valuation level can lead to more moderate returns in the long term.
At the same time, the S&P 500 has recorded a performance of about 16% over the past 90 days and nearly 10% over a year, indicating strong short-term momentum. This development might give investors hope that double-digit gains are possible in the coming months.
The Role of Champion Stocks
Additionally, analyses of so-called champion stocks – meaning particularly stable and high-yield stocks with a long-term success story – have shown impressive price gains since the beginning of 2010. An investment in these top 100 stocks would have multiplied by mid-2025. This indicates a certain resilience and growth potential in the U.S. stock market.
Nevertheless, it remains true: Despite positive historical patterns, there is no guarantee that stock markets will rise double digits soon. Markets can be influenced by many factors such as economic developments, interest rate policies, or geopolitical events.
Conclusion: A historical metric like the CAPE suggests moderate returns in the long term, while current short-term performance data may indicate double-digit gains. It remains important for investors to see these signals in context and consider risks. A secure rise of more than ten percent in the near future is possible but not guaranteed.