Stock market investors are optimistic by nature, and that is particularly true today as they have record exposure to equities and are employing many strategies and vehicles that could be deemed highly speculative. On the other hand, bond investors tend to be somewhat...
One basic principle of finance is that stocks are riskier than bonds and should therefore provide a premium return. With stocks generating annual returns of 10% and bonds 4.5%, this equity risk premium has averaged 5.5% since 1928. Of course, the key question...
