since we're seeing risk free rates such as CD, short to mid t bills, savings and other risk free investments yielding anywhere from 4 to 5%+, then it really doesn't make much sense to be in equities unless if they yield at least 4-5% say in the next 1-2 yrs, based on the maturity rates of these short and mid term investments. The risk premium shifts, but considering possibly more volatility, it seem that we should expect more from equity returns in exchange for the higher risk than the other assets. it seems that some people believe the risk free rate will decrease soon if they cut the rates or something, or if everyone crowds into the risk free space to drive down the rates, so that is partly why the yield inversion still persistent but there's no indication that theres been other effects. Some people are putting into mid to long term bills. But the short term rate remain high, so short term its not attractive in stocks, it would take more return from equities or people could just invest in Bonds and CDs.
[link] [comments] https://www.reddit.com/r/stocks/comments/1229nju/what_would_be_the_expected_equity_risk_premium/
Login to add comment
Other posts in this group
Please use this thread to discuss your portfolio, learn of other stock tickers, and help out users by giving constructive criticism.
Why quarterly? Public comp
When you sell a stock to buy another stock, do you prefer to set the estimated amount of the capital gains taxes aside in a money market or do you think it better to
Saving for retirement is crucial, but relying solely on a 401(k) might not be enough due to high inflation. Consider investing in growth stocks, especially in the tec
I’m think this is not a good investment as there is no chatter at all on the 52 week low. They are involved in a class action lawsuits by investors and credit card co
Sorry if this is the wrong sub. Let’s say I had $1 million in VOO but I wanted to sell half of it to buy SCHD. It would suck to pay taxes on $500k. So how would you g
Hey guys, I did a deep dive into Crocs. In this analysis, I will do a brief breakdown of the company and go over some quantitative data, qualitative data and estimate
