In theory, the S&P 500 should rise in line with earnings. In practice this does not happen.
While this comes as no surprise, the scale of the difference is astounding.
| Period | Earnings Growth | S&P 500 Returns |
| 2003-2013 | 148% | 68% |
| 1993-2003 | 16% | 137% |
| 1983-1993 | 5% | 179% |
Across three decades the date shows that the S&P 500 has almost no correlation to earnings growth. The current period, 2003 to 2013 has seen the fastest earnings growth but the slowest S&P 500 growth.
However, the period of 1983 to 1993 saw earnings only grow a measly 5%, while the S&P 500 expanded 179%.