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The “single greatest predictor” of future stock-market returns has never been more bearish.
This indicator is based on the average U.S. household’s allocation to equities.
It was introduced in 2013, and given its name by the anonymous author of the “Philosophical Economics” blog. The indicator’s creator reported that it had a better track record predicting the U.S. stock market’s 10-year return than any of the other valuation indicators of which he/she was aware. I also have failed to find an indicator with a better record.
