Historic pace of stoc

Returning to the historic pace of stock returns means a big decline from the
pace of the 1990s. Total returns and real total returns, adjusted for inflation,
at compound annual rates.
Source: Ibbotson Associates. Data from Standard & Poor’s.
2006, the price-to-earnings ratio for the S&P 500 stock index
was 17.4, according to Standard & Poor’s. That is above the P/E
average of 16.1 since World War II, although it is well below its
peak of 46.5 for 2001.
The P/E ratio on the Dow Jones Wilshire 5000 index, which
includes all stocks of companies based in the United States, was
19.5 at the end of 2006, according to Wilshire Associates, just
above its annual average of 19.3 since 1979. So valuations do not
have that far to rise before they could become a worry.
Jeremy J. Siegel, the Russell E. Palmer Professor of Finance at
the Wharton School of the University of Pennsylvania and the author
of the influential book Stocks for the Long Run, expects the
real, or after-inflation, compound annual rate of total return to
fall to 6 percent, a full percentage point below the real return
since World War II and less than half the real compound annual
rate of return of 14.8 percent from 1982 through 1999. And he
acknowledged in an e-mail interview that the real return could
fall lower