equity risk premium
As the equity risk premium declines, alpha becomes critical. Discover how investors can adapt through factor strategies and global diversification.
Stocks are a good wager over the long term, on favorable odds. But stocks remain a bet, and investors must grasp how much returns can vary over long time horizons.
What are the most popular top five articles of 2023 published under the Capital Markets theme by the CFA Institute Research and Policy Center?
"There’s one aspect of MMT that I have some sympathy for: the notion that what we spend money on is far more important than how we finance it." — Cliff Asness
"Has the hedge property overtaken the investment property of fixed-income assets?"
“How many here think the next 10-year equity returns are going to be below the long-run average? I certainly do. Is there anyone here who doesn’t?”
Does the equity risk premium (ERP) vary depending on the term structure? Does reversion to the mean dictate that it will decrease the longer the time horizon?
The capital asset pricing model (CAPM) is a marvel of economic scholarship. The problem is that it doesn’t always work in practice. So, we fixed it.
"If we thought of the equity premium as a fear premium," Rob Arnott says, "a lot of the so-called anomalies that we’ve talked about would not be anomalies at all."
Cliff Asness, Rob Arnott, Roger G. Ibbotson, and other luminaries explore the nature of bubbles and the momentum factor.