[jyl]

Market went nowhere for a decade in late 1960s and 1970s. High inflation -> high interest rates -> low stock valuations.

Then inflation was whipped. Volcker Fed, end of OPEC oil embargo, end of Vietnam war, etc. Interest rates went on a multi-decade decline.

I once spent a fair bit of time doing regressions on every factor I could think of, vs SP500 P/E. The most explanatory factors, other than the previous year's P/E, were CPI inflation and interest rates. EPS growth, revenue growth, GDP growth, etc were all far less explanatory.

Other reasons too. Technology sector took off. Financial system innovations. Long decline in savings rate. Increase in debt leverage.

We've been in another going nowhere market since 2000, over a decade now. At some point that stagnant trend will break. Kind of like it did starting in 1980s.

Scary chart? Try inflation adjusting the increase over 35 years. The real return will look more reasonable.