2013 was a banner year for equities and optimism seems to be quite pervasive following that. I regularly speak with market participants that are expecting 10%+ annual returns over the next decade and I believe that the likelihood that they will achieve that is quite slim. Warren Buffett has mentioned that the ratio of Total Market Cap over GNP is one of the best measure of market valuations and currently this ratio implies negative future returns, assuming a reversion to the mean. In addition, the Shiller P/E is exceptionally high while margins are also significantly in excess of long-term averages. Interest rates have nowhere to go but up, which typically has a negative impact on valuations. There are still attractive investment opportunities in the market, but I believe that just being long stocks or bonds through an index or mutual funds is not a very productive utilization of capital.