U.S. stocks have delivered 8.7% a year since independence was declared in 1776

Bank of America’s analysis highlights a long-run benchmark: U.S. stocks have generated 8.7% annualized returns since 1776 versus average GDP of 6% and inflation of 2.5%. Over the same period, 10-year U.S. Treasury bonds returned about 5.1% annually. The piece is primarily historical context with limited near-term implications for portfolios.

Analysis

This is primarily a sentiment/asset-allocation reminder, not a fundamental catalyst. The only immediate market mechanism is marginal reinforcement of U.S. equity home bias, which helps broad-beta products and asset gatherers more than any single operating company. For BAC, the indirect upside is modest: higher equity participation can lift trading and wealth-management activity at the margin, but there is no clean earnings revision here. CRMT has essentially no read-through.

The bigger issue is that the historical return framing is backward-looking and almost certainly overstates what investors should expect from today’s starting point. The last long cycle benefited from falling rates, multiple expansion, and disinflation; those tailwinds are not guaranteed from here. That makes the article more useful as a contrarian check than as a buy signal: if investors use it to justify paying up for U.S. index beta, forward returns likely compress rather than repeat the 250-year average.

Time horizon matters. Over days, this should be noise; over 1-3 months, it may slightly support passive inflows into SPY/VOO and U.S. financials if risk appetite broadens; over 6-18 months, valuations and real yields dominate the outcome. The thesis is falsified if earnings breadth improves, real yields fall materially, and BAC shows a sustained pickup in client cash deployment and capital-markets activity—otherwise, this is more likely a reminder to hedge complacency than to chase it.

Key Decisions for Investors

• BAC: remain neutral for now; do not trade this memo alone. Reassess after the next earnings print for evidence of higher trading volumes or wealth-management net inflows.
• Express a contrarian view with 1-3 month SPY put spreads on strength if U.S. equity multiples stay elevated; use this as a low-cost hedge against narrative-driven overbuying. Invalidate above prior highs with improving breadth.
• Relative-value hedge: long TLT / short SPY on pullbacks if real yields remain restrictive. The payoff is best if the market starts pricing a slower growth path or Fed easing; cut if 10Y real yields break to new highs.
• CRMT: no actionable read-through; avoid forcing a consumer-cyclical trade from a macro-history article.
• If you want U.S.-exceptionalism exposure, prefer a basket of quality cash generators over high-beta index beta; that gives better downside control if the historical average proves misleading.