Long term U.S. equity growth has been on a continued decline, resulting in a DJIA practically where it was 10 years ago. The case can be made that we're in the middle stages of the next great secular equity bear market as:
- Profit margins are being eaten alive from higher financing / commodity costs
- Current price multiples are at "appalling" levels
- The U.S. economy is slowing with a potentially deflationary environment in the future
In looking at the chart above, the current market action looks a lot like the late 1960's /early 1970's (and the early 1970's may not be an awful comparison). I am not yet buying into ANOTHER lost decade for U.S. equity markets, but I'd love to hear a convincing argument as to why I should be bullish over the secular horizon?