When Main Street Speaks … Investors Should Listen

According to the Main Street Meter (MSM), this middle-aged stock market should continue surprising many by delivering a satisfying 10%ish average annualized total return in the coming five years.

The contemporary character of the Main Street economy has historically been a harbinger of future stock market returns. Specifically, the mindset of private economic players (i.e., are they sufficiently confident to engage in aggressive behaviors or are overwhelming worries dominating economic decisions) and the degree of aggregate resource slack (proxied by the unemployment rate) have provided a good indication of how the stock market performs in the ensuing five years.

Amongst the daily deluge of what President-elect Trump may do when he takes office, whether the Fed will or won’t steadily cut interest rates, Mag7 news, and ongoing reports of UFO drones stalking neighborhoods at night, perhaps it’s a good time to take a step back, forget about tomorrow, next week, next month, or even next year, and consider how the stock market climate is shaping up for the next several years? So, sit back and enjoy an adult holiday beverage and listen to what Main Street is saying about your portfolio as we enter 2025.

Welcome to the Main Street Meter (MSM)

I am unsure when I first developed the Main Street Meter (MSM) but periodically have referred to its counsel over the years. The MSM is a remarkably simple but powerful “meter” of future stock market returns.