The stock market’s next 20 years will be defined by technological innovation — and the most likely scenario is 7% annual growth, DataTrek says

REUTERS While the press tends to focus on what stocks will do in the short term, the bigger (and more important) question facing all investors is: “What will US stocks do over the next 20 years?” DataTrek co-founder Nicholas Colas said in a note on Friday that the answer to that question will be determined by the pace of technological innovation, as that fuels productivity gains, which boost corporate profits, which drive stock prices. Over the next two decades, investors should expect average annual returns of 7% for US stocks, with upside potential dependent on the pace of technological innovation, according to the note. While the day-to-day fluctuations of the stock market lead investors and the media to ask what stocks will do in the short term, the bigger and more important question investors should be laser-focused on is: What will US stocks do over the next 20 years? That’s according to DataTrek co-founder Nicholas Colas, who observed in a note on Friday that long-term returns can have a sizable impact on how investors allocate capital, pointing to a surge in venture capital and private equity ownership among endowments and pensions after the S&P 500 posted a negative total […]

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