Nobody knows and nobody can say for sure…

There are stock markets that have done very badly and have not reached the old peaks:


The Japanese economy was the strongest in the 80s, the market topped at around 38,000 points, fast forward almost 30 years, and it’s trading below 23,000 points.

You need another +50% from this level to get even.

The point is that if the investors believe that the market won’t ever go down, that it will go up and will go up fast, a feedback loop kicks in, a self fulfilling prophecy occurs, and the stock market shoots up very high. 
If it gets too prohibitively high, then the stock market won’t go higher, like it happened to Japan in 1989.

I believe that there are a couple of important trends that are driving up the valuations of companies that comprise the index:

(a) Globalization, because you have larger potential markets, i.e. higher predisposition to make money, but the world is finite, once you enter Asia, you enter Africa (assuming these markets will be rich enough and the population will have a certain degree of propensity to consume), you’re done.

(b) Compounding resources and better analytical tools, in the sense that today we are “standing on the shoulders of giants”, a lot of researches have been made and the corporate world is much less a mistery than it was 20 or 30 years ago. Merging AOL and Time Warner? I don’t think a dumber merger could occur now that we have the hindsight, now that we have more data, now that employees or aspiring employees have a more transparent view of the job market (e.g. through Linkedin/Glassdoor) and know that company X is better at solving problems than company Y which has a toxic culture, and so the best resources will be attracted by a small minority of companies, that will compound this advantage, will have higher return on investments, etc etc.

Trend that could have a negative impact on the stock market valuations:

(x) Commodification of various products/services. E.g. you see that the number of SaaS that reach high ARR in a short amount of time is getting higher, is this a market where there are higher barriers to entry and that would entail excess profits for a minority of company (as in point (b)), OR, if everybody can do it, then there’s no moat and the companies deserve compressed multiples because they won’t make more money or scale further, e.g. the paradigm on which Uber’s valuation is based is flawed and the company will get much lower in 10 years, ditto for Tesla or Lyft or whatever.
If Amazon acquires an online pharmacy, then the physical pharmacies may have to lower their returns because Amazon will bring a price war and these will be forced out in the mid term while Amazon will be alive in the long term.