(April 30) – “Fred Walsh, a New York City high school teacher, says he isn’t looking to shoot the moon in the stock market. He simply expects stocks to start behaving normally again,” writes E.S. Browning in today’s Wall Street Journal.

“Ah, but what is ‘normal’?”

“Standing in a Fidelity Investments office in Manhattan, poring over his mutual-fund returns, Mr. Walsh says he merely looks for the market to rise ‘about 10% to 15% a year, something like that.’ History is on his side, he says: The market is ‘going to go up; it’s just a matter of time.’ “

“A lot of Americans feel that way, according to a survey conducted one month ago. Many investors still remember how routinely stocks rose during the bull market that stumbled in the past year, and they consider those consistent double-digit gains to be normal; these investors say they can deal with the past year’s market mayhem, but they also are expecting the stock market will shortly return to climbing 10% or more each year. Many expect even bigger gains.”

“While such exuberance may help support stocks in the short run, it scares some people who have studied the stock market.”

“Based on history, they say, average returns over the next decade might be only in the single digits. Mr. Walsh says that he won’t take his money out of stocks even if gains are weak. But market historians say that if returns are disappointing some people who are confident today could end up dumping some stocks, depressing the market further.”

” ‘I don’t want to overemphasize it,’ says Jeremy Siegel, professor of finance at the University of Pennsylvania’s Wharton School in Philadelphia. ‘But yes, there is a risk that people will get very discouraged after a couple of bad years and pull out, and that that will lead to downward pressure on equity prices.’ “