Sensible Investing

I wrote earlier about comparing total stock market capitalization with Gross National Product.  This article from GuruFocus.com computes the ratio of market capitalization to GNP for the last 40 years.  It contends that currently, stocks are modestly undervalued, and are likely to return 11% per year for the next 8 years.  At this rate, it will take 5 years to return to previous highs.  Still, this forecast is positive and is certainly better what we had to endure for the last year and a half!