See earlier discussion here and here.
Earnings for the S&P 500 were $58.55 at the end of December 2004. The long-term rate of earnings growth is 6.1%. Compounding that for 10 years gives us an estimate of $105.85 in a decade. For the high and low estimates, we used the standard deviation of earnings growth of plus or minus 2.3 percentage points. Essentially, this means that two-thirds of 10-year periods will experience annual earnings growth ranging from 3.8% to 8.4%. We can then estimate that in 2014, earnings for the S&P 500 are likely to fall in the range of $85.02 to $131.17.
Over the past 55 years, the stock market has sold at an average of 16.4 times earnings, with a standard deviation of plus or minus 7.0 times earnings. This means that a reasonable range for multiples is 9.4 times to 23.4 times earnings. Using this methodology, we can estimate the likely range of values for the S&P 500 in 10 years.
The likely range for the S&P 500 Index in 2014 would be 761.59 to 3069.14. This equates to an average return of minus 1.7% per year to plus 12.2% per year. The base case scenario calls for the S&P 500 Index to be at 1735.94, a yearly 4.1% rate of appreciation. Adding dividend income of 1.9% to the appreciation yields a total return of 6.0% per year -- something between minus 1.7% and plus 12.2% a year.