Published November 3, 2023
Below is a brief discussion from Delta Research on the risk premium that stocks are currently offering. With U.S. Treasury bonds (aka the “no risk” asset) yielding 5%+, for the first time in years, bonds are a solid competitor to stocks.
Investors buy “risky” assets because they believe the excess return will be sufficiently attractive to make the risky asset a better-buy than the low/no-risk asset. All investing requires predictions about the future and as a result, an element of risk. To improve the likelihood of achieving attractive portfolio returns, we use probabilities and math to form calculated risk expectations about future returns. (more…)
