The expected real return on the stock market is positive.
The return that you expect might be positive but in general different people can have different beliefs about what they expect the SAP500 to do in the next ten years.
No. Conservative investment strategies aren’t about buying SAP500 and buying shorts on it.
They are about buying treasury bonds. Some rational players in the market do buy bonds. If you want at the expected return of the market you have to look at treasury rates given inflation adjustment.
Quick googling reveal 2.65% for treasury bonds. Official inflation rates are 1.5%.
That means expected return on your money is 1.15%. You could however say that the official inflation numbers are messaged and the market is generally too optimistic. The difference from 1.15% to negative expectations isn’t that high.
If you think the market is off by 1.2% you don’t gain a high return by betting on corresponding futures.
The expected real return on the stock market is positive. You shouldn’t hold large cash balances.
The return that you expect might be positive but in general different people can have different beliefs about what they expect the SAP500 to do in the next ten years.
The expected return implicit in futures rates is positive. If you disagree you should short futures and earn a positive return that way.
No. Conservative investment strategies aren’t about buying SAP500 and buying shorts on it.
They are about buying treasury bonds. Some rational players in the market do buy bonds. If you want at the expected return of the market you have to look at treasury rates given inflation adjustment.
Quick googling reveal 2.65% for treasury bonds. Official inflation rates are 1.5%.
That means expected return on your money is 1.15%. You could however say that the official inflation numbers are messaged and the market is generally too optimistic. The difference from 1.15% to negative expectations isn’t that high.
If you think the market is off by 1.2% you don’t gain a high return by betting on corresponding futures.