Stock Market Returns Cannot Exceed Intrinsic Value Growth Forever - Seeking Alpha

Stock Market Returns Cannot Exceed Intrinsic Value Growth Forever - Seeking Alpha



This is an interesting article by Grey Owl Capital.  If you take the long view over the last 14 years, aggregate bonds have outperformed stocks as well as being safer.  I am not saying we should exit stocks, but a substantial bond allocation should be part of a person's portfolio at all times.  Grey Owl is also correct that 2014 will most likely not be a repeat of 29% on the S&P 500.  The return for stocks will be less and less until the bull market rolls over and starts giving losses.  Thus, another part of your portfolio should be invested in shorting the market or betting on volatility with VXX or TVIX.  Around 10% of my portfolio is currently in TVIX because I believe stock market trouble could occur again just like the 6% pullback we recently experienced.  I made a 37% profit on TVIX then.  You must be certain to sell while you have a profit, though.