Twenty Year Periods with a Negative Risk Premium

...The inflation rate, the dividend yield relative to the yield on Treasury bonds, and the P/E ratio suggest that we are coming into a time when stock returns will be considerably diminished relative to the return on bonds...Over very long periods of time stocks must outperform bonds, because investors must be rewarded for riskier assets, and we will experience again in the future conditions that warrant higher prospective returns in stocks...the baseline conditions must change, a process that May result in an extended period when bond returns will equal, or even exceed, returns on stocks.

negative risk returns

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