Search Results for: premium

S&P 500 vs. S&P 500 Equal-Weight The S&P 500 cap-weighted index return premium has reached extreme levels. Should investors now favor the S&P 500 equal-weighted index over the cap-weighted index? Image: Morgan Stanley Wealth Management

Valuation – S&P 500 Normalized P/E Ratio At 22x, the S&P 500 is currently trading over 40% above the long-term average, which suggests that investors are willing to pay a premium for stocks in the index. Image: BofA US Equity & Quant Strategy

10-Year U.S. Treasury Yield Less CPI Given investors’ historic tendency to demand a 200 basis point premium over inflation rates, could rates rise further? Image: Morgan Stanley Wealth Management

S&P 500 ERP and S&P 500 Fwd vs. Trailing EPS The S&P 500 looks unattractive until the equity risk premium increases. Image: Morgan Stanley Research

Implied Volatility (VIX) and Realized S&P 500 Volatility (1-Month) According to Goldman Sachs, the volatility risk premium will return toward 2021’s highs in the coming weeks. Image: Goldman Sachs Global Investment Research

Valuation – 12-Month Forward P/E of Top vs. Bottom Quintile Does valuation still matter? The premium of the 20% most expensive companies is near highs. Image: Goldman Sachs Global Investment Research

Cross-Asset Valuations on their 10-Year Range Equity risk premiums suggest that equities are still cheaper than average. Image: Morgan Stanley Research

Relative P/E Valuation of Stable Growth vs. Variable Growth S&P 500 Companies Investors are paying a huge premium for stable growth S&P 500 companies vs. variable growth companies. Image: Goldman Sachs Global Investment Research

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. Image: Fidelity Investments