The End of Ten Years Growth of U.S. Stock Market

Whether the ten years growth of U.S. stock market will end is not an issue, when will the trend reverse begin is an issue.
The trigger of the reverse process of U.S. stock market is very likely to be the large scale net outflow of passive index funds. The dropping of major market index such as SP500 would create panic among passive fund investors, pushing them to redeem their shares, which would start a self-reinforencing process of price fall in the general market.

The Russel 3000 index market cap is USD 30 trillion by Jan 18, 2018. (https://www.barrons.com/articles/buy-alphabet-stock-because-googles-cloud-is-gaining-momentum-51569078000)
The Russel 3000 index is 1,575.36 by Jan 18, 2018. It is 1755.31 by Sep 20, 2019.
The Russel 3000 index market cap as of Sep 20, 2019 is 33.4 trillion. The total market cap of U.S. public traded equity is about 34.1 trillion.

U.S. passive equity fund, $4.271 trillion. U.S. active equity fund, $4.246 trillion.
http://money.com/money/5654835/index-funds-assets-top-active/

The U.S passive equity fund accounts for about 12.5% of U.S. market cap.

U.S. market structure
https://www.sec.gov/news/statement/us-equity-market-structure.html
U.S. institutional investor share percentage
https://www.sec.gov/news/speech/2013-spch041913laahtm
http://finance.wharton.upenn.edu/~keim/research/ChangingInstitutionPreferences_21Aug2012.pdf

Market Participants

  1. Active Mutual Funds
  2. Passive Mutual Funds
  3. Pension Funds
  4. Insurance Companies
  5. Hedge Funds
  6. Managed Accounts
  7. Investment Companies
  8. Individual Investors (Shareholders)

Systematic Risk Brought By ETF

https://www.esrb.europa.eu/pub/pdf/asc/esrb.asc190617_9_canetfscontributesystemicrisk~983ea11870.en.pdf

The Bigest Trend of the Ten Years Peroid

The bigest trend in 10 year in global economy is that the abnormal montary policy as well as the low/negative risk-free interest rate in Europe and U.S. has become the new norm. Europe central bank and Federal Reserve retart QE to provide liquidity. The abnormal monetary policy of structurally low interest rates is the new normal. Savings are punished and borrowings are encouraged. The authority in Europe and U.S. are execively relying on monetary policy to support economy growth. Interest rate is brought down to below zero in Europe and Japan, which changes the fundamentals in both the financial system and modern economy as the principle of time value of money is breached.

Real Estate Sector

Green Street Commercial Property Price Index
https://www.greenstreetadvisors.com/insights/CPPI
S&P/Case-Shiller U.S. National Home Price Index
https://fred.stlouisfed.org/series/CSUSHPISA
Commercial Real Estate Prices for United States
https://fred.stlouisfed.org/series/COMREPUSQ159N

经济增长与货币政策

在现代以纸币为基础的经济金融体系下,实现经济增长是驱动央行货币政策调整的源动力。经济体系对央行货币政策已经形成路径依赖,货币政策对生产力发展的边际促进作用逐渐弱化。
社会财富管理体系下,同业竞争和佣金收入结构决定了机构投资不可避免的继续涌入股票和债务市场,推动了各类资产价格的抬升,对货币流动性产生挤压作用,同时降低了资产的边际投资收益。