Timeline for If markets are efficient, why are most returns systematically high?
Current License: CC BY-SA 4.0
8 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Jun 10, 2018 at 17:24 | comment | added | vonjd | @fni: Thank you, will have a look at your answer. | |
| Jun 10, 2018 at 17:10 | comment | added | fni | @phdstudent is right. Read my answer below to have a clarification on why prices on average should increase without requiring any equity premium puzzle | |
| Jun 7, 2018 at 17:27 | comment | added | vonjd | @phdstudent: Well, technically you are correct, but I think they are closely connected: the expected returns for equities over bonds would be much lower compared to their actual returns. | |
| Jun 7, 2018 at 17:23 | comment | added | phdstudent | Just a comment, the equity premium puzzle is about the level of the returns nothing to do with what OP was asking regarding why expectations are lower than realizations. | |
| Jun 7, 2018 at 17:17 | comment | added | phdstudent | Probably the most common explanations are Habits, fears of Long-run risk or disasters. But that would entail a whole different question. My answer below also sheds some light on your question. | |
| Jun 7, 2018 at 17:14 | vote | accept | user526463 | ||
| Jun 7, 2018 at 17:13 | comment | added | user526463 | Thanks for this, and for your welcome! Really interesting enigma. From wikipedia I see risk aversion, consumption variability, loss aversion, statistical illusions as explanations of this phenomenon. Do you have any idea which explanation is most popular? | |
| Jun 7, 2018 at 17:10 | history | answered | vonjd | CC BY-SA 4.0 |