Yes, it's that time again to calculate the Market Risk Premium for the ASX200 and it's massive.
Usual methodology applies. Last 2.5 years of daily returns of ASX200 gives us an average capital gain of 6% (alot better than Septembers 2%). It has almost tripled. Add on the average dividend yield of 4.625% and you get a total return from the share market of almost 10.70% (that's great guns)
The average 10 year bond rate has reduced to 3.70% as investors like the look of our bonds as well (I don't really know why...ultimately the price of bonds will drop like a stone).
All up, it means that the market risk premium is now at 7%. Wait for the correction...it should be coming.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment