Market Risk Premium of ASX200 in June 2016: 0.4578%

That time again to test the market risk premium of the ASX200.


As mentioned last time, I assumed that as the market risk premium had turned negative in March, either the Bond rate had to drop, or returns had to improve. In fact both occurred. (Go me!)


Average 10 year Bond rate, due to the RBA dropping rates again, has reduced further to 3.04% from 3.22%


The ASX200 average return has improved slightly to -0.91%


Dividend yield has improved slightly as well to 4.407%. Meaning the market return has increased to 3.5% compared to 2.6% previously.


So that means the Market risk premium has turned positive once again to 0.5% Way off the long term average, so still think there is some life left in the ASX rally.

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