Posted By 
By Christopher Gannatti, WisdomTree Associate Director of Research
Special to the Financial Independence Hub
Over the period of about the last three years, the annualized returns of the S&P 500 Index have been nearly 12%. That is a strong number, and it shouldn’t be surprising that U.S. stocks are more expensive now than they were then.
Let’s discuss what has been driving these returns and analyze various factor strategies to shed light on their potential to continue this trend in returns going forward.
Multiple Expansion, Earnings Growth or Dividend Yield: what’s most Important?
By itself, an index’s trailing total return may not say much about its future return potential. Fortunately, we can model different drivers behind performance by deconstructing the three separate components of total return:
• Average Dividend Yield
