Friday, July 4, 2014

Market Risk Premium for June 2014: 12.01%

Yep, its time for the all important Market Risk Premium for 30 June 2014. This is the risk premium that goes into all the valuations for stocks from the annual reports.

Using the same methodology as always...we have the capital return for the market over the trading days of the year to be 11.13% Add the average dividend yield over that period of 4.51% and you have a total market return being 15.64% (a bit down from March)

Average 10 year bond yield is now 3.63% and you have the Market risk premium of 12.01% (down from March).

So, still high but on the decline. I wonder if this is the beginning of the long awaited correction. It would not surprise.

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