Part 2/9:
Over the last year, the stock market has surged by approximately 27%, while global economic growth is only projected at 2.6% for the current year. If we analyze the past five years, the stock market has enhanced by roughly 83%, yet global GDP has seen a mere 12% rise. This discord leads us to ask: How is such stock market growth sustainable?
The Historical Context of Market Returns
Historically, global stock markets have achieved an average annual growth rate of about 10% over the past century, compared to a mere 3% growth rate for global GDP. This raises the question of viability - can stock markets truly outpace economic growth indefinitely? The straightforward answer is: no, they cannot.