We are bullish on US stocks, but we only expect single-digit annual returns between now and the next US recession.  If recession is many years away, as we expect, then the risk/reward tradeoff for stocks versus bonds or cash remains compelling.  We anticipate a prolonged, but slow expansion due to global disinflationary forces (excess supply of labor, capital goods, and some commodities).

David Fuller's view

Here is The Weekly View.

There are two very important graphs in this issue which Subscribers are likely to be interested in.

The Weekly View’s forecast sounds logical and sensible to me, and their forecast range for the S&P 500 in 2015 is between 1870 and 2380, compared to today’s level of 2054.  This is based on low interest rates and a 6.1% growth rate in earnings. 

The Weekly View’s topside range of 2380, I suggest, is based on the most benign of global outcomes.  In other words, it is possible but not probable, at least not for long.  There is too much scope for a Russian military event and/or some other unpleasant development which causes investors to take fright temporarily.  Nevertheless, equities still look like the best bet to me.  If so, a number of other stock markets are likely to outperform Wall Street, not least from the Asia Pacific region.