S&P 500 Valuation and Equity Risk Premium

S&P 500 Valuation and Equity Risk Premium This chart shows that the equity risk premium (earnings yield less 10-year Treasury yield) has declined to 3.9%. Picture source: Fidelity Investments

Equity Risk Premium

Equity Risk Premium The equity risk premium (earnings yield less bond yield) stands at 4.48% (the 90th percentile since 1985). It suggests that equities are cheap relative to bonds. Picture source: Fidelity Investments

The Equity Risk Premium May Be Bullish

The Equity Risk Premium May Be Bullish The equity risk premium suggests that the S&P 500 is not overvalued, which may be a bullish signal. You may also like our “Stock Market Equity Risk Premium.” Picture source: Fidelity Management and Research

Why a Low or Negative Equity Risk Premium Coincides with a Temporary Market Peak?

Why a Low or Negative Equity Risk Premium Coincides with a Temporary Market Peak? Because it pushes investors into bonds rather than equities. This was the case in 1973, 1981, 2000, 2007 and 2018 before the market crash. The current equity risk premium is available to our subscribers. Our equity risk premium model has a great 99% correlation with…

Stock Market Equity Risk Premium

https://www.isabelnet.com/wp-content/uploads/2019/03/stock-market-equity-risk-premium.mp4 This fabulous model shows if the US stock market return for the next 10 years is more or less attractive than the 10-Year Treasury Note The US stock market equity risk premium is the US stock market excess return for the next 10 years over the 10-year treasury Note. This is the premium that…

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U.S. Rates

U.S. Rates Chart showing the dramatic plunge in interest rates over the past 10 months. On the positive side, the equity risk premium (ERP) is now higher. Picture source: Fidelity Investments