Expectation of stock market returns

I've been thinking about the sort of returns that it is reasonable to expect from investing in the stock market. It's suprisingly easy to come up with a number, subject to a few reasonable assumptions.

Assume that listed corporate profits will remain roughly the same proportion of global GDP. This precludes any dramatic movement of unlisted firms onto the stockmarket, or any permanent systemic change to profit margins.

Assume that the amount of money reinvested by firms remains roughly the same. This means no permanent switch to forever paying higher or lower dividends as a percentage of profit.

Assume that P/E ratios remain roughly constant in the long run. This precludes any general re-rating, e.g. because of permanently higher or lower real interest rates.

Subject to these assumptions, the real return from investing in the stockmarket is (GDP growth + Dividend yield).

There are added complications when investing in the stockmarket of an individual country, since that country's firms may make profits abroad and therefore profits earnt on that country's stockmarket could rise as a proportion of GDP. But I would say the effect of that is likely to be minimal.

So, in the UK we could reasonably expect real returns of 6%, judged on GDP growth of 2.5% and a 3.5% yield. That would be 9% after adjusting for 3% inflation - better than a savings account, anyway.