risk

85 Posts

Estimating Variations in the Equity Risk Premium: A New Approach

For years, researchers have used historical returns as proxies for estimating equity risk premium. This approach is problematic, however, because the resulting estimates don’t vary from one year to the next, even though equity market returns can be wildly divergent from year to year. Katsunari Yamaguchi, CFA, has developed a new method for estimating equity premiums. Read more

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Only Buy Insurance When You Can’t Afford the Loss

Only Buy Insurance When You Can't Afford the Loss

Not buying insurance for things we can afford to replace or have happen does not mean that those things won’t occur, it just means that instead of having the small bleed of constantly paying premiums for things, we will once in a while be paying out larger replacement amounts for things we did not insure against. However, you should not save on insurance premium payments in instances where you can’t afford the loss. Read more

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