Three things the Equity Risk Premium is telling us about investment markets

12th Feb 2019 – Chris Di Leva

  • Equity Risk Premiums (the additional expected return from equities over bonds) are currently elevated Globally and in the US, while less so in NZ.
  • Entering equity markets at a higher equity risk premium has traditionally been a smarter decision than entering at a lower equity risk premium.
  • If we see a reduction in the equity risk premium from elevated levels, this is likely to favour growth/cyclical assets as opposed to defensives.

Read Chris’s full post here >