1/ A short thread, just so investors know the long-term prospects they're locking in at current equity and bond market valuations. Not a near-term directional forecast, or even a suggestion of what to do (though I'll note that our measures of internals remain divergent here). 
2/ It's important to understand that a good valuation measure is nothing but shorthand for a proper discounted cash flow valuation. At present, the most reliable measures suggest prices are ~ 3x the level that would imply future long-term returns close to the ~10% historical norm
3/ Here's a scatter of the most reliable measure we've studied or introduced: nonfinancial market cap / gross value-added (including estimated foreign revenues). The axis is scaled to reflect current levels on the S&P 500. With the S&P 500 at 3145, projected 12yr returns are zero
4/ … We can't rule out further speculation (tho our measures of internals remain divergent here), but it's worth noting that our projection of 12-year total returns on a conventional 60% SPX, 30% T-bond, 10% T-bill mix is now within 0.01% of the historic low set in Aug 1929.
