10-Year Annualized Equity Returns Remain Below Average

Franklin Templeton Investments published recent commentary on their positive view of equities both in the U.S. and in Europe. The entire article is a worthwhile read; however, one chart included in the write up was the one below showing 10-year annualized returns going back to 1825. As the chart shows, in spite of the strong bull market in equities around the world send the bottoming of the financial crisis in 2009, the compounded 10-year annualized return remains pretty far below average.

From The Blog of HORAN Capital Advisors

Source: Franklin Templeton Investments

The market's recovery since the end of the financial crisis seems to have occurred almost without any significant pullback. As the above chart shows though, a pullback or correction would not be an uncommon occurrence. However, timing the market is difficult and technically speaking, further highs in equities seem more likely than not. A key to further equity market strength will be positive developments on the economic front. The coming shortened trading week will see a large number of economic reports release that should shed some light on the state of the U.S. economy.