Well, that's the thinking behind this chart.
https://www.gmo.com/contentassets/e116b5c3b8c24a1f...

I'm sure many of you have seen these before, this is just the latest edition, for asset prices at May 31.

It's not good as a prediction of the market direction any time soon, but it's an excellent source of a sane assumption of returns in the next several years: what you'll get if valuation levels are their historically usual levels seven years after purchase. Their forecast from 2000 turned out preposterously accurate, but that was mostly luck...there is no magic law that says assets will be typically valued at typical levels a specific amount of time in the future.

I think their expectation for large cap US stocks has been too low pretty frequently in the last decade or two, in part I think because they use deeper history than I do when trying to estimate what a "normal" valuation level is.

Jim

Mechanical Investing FAQ

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