Sentences with phrase «on equity risk premiums»

No Irrational Exuberance In an interview with CNBC's Squawk Box, former US Fed Chair Alan Greenspan says that stock markets are «significantly undervalued» based on equity risk premiums (here's a good explanation of ERP).

Comments: «In addition to forecasting positive earnings growth this year (which we did not in 2012), we are also using a slightly higher multiple to reflect the positive impact of heavy central bank intervention on the equity risk premium.»

Not exact matches

On the other hand, it is important to note that the spread between earnings price ratios and real interest rates are at near record levels, and that is a crude measure of the equity risk premium.

With a declining equity risk premium, investors should be diligent in minimizing the drags on returns from taxes, transaction fees and mutual fund management fees.

They also consider the effect of U.S. and European economic policy uncertainty on the U.S. equity risk premium.

Chapter 15 — Implications for Companies advises companies on adjusting their decision - making to an era of international projects and a lower equity risk premium.

Moving toward limits on interest deductibility in situations like many private equity deals where debt has equity - like risk premiums would raise revenue and increase financial stability.

Currently, in the Euro Zone ex UK, the equity risk premium is already above levels seen in the European debt crisis in 2011 and closing in on the 2009 highs of close to 900 basis points.

The proposed momentum underlay chooses SPY, iShares S&P 500 Value (IVE) or iShares S&P 500 Growth (IVW) based on highest five - month past return whenever the equity risk premium is most undervalued.

So when you hear arguments that the «equity risk premium» is wonderful, or that «stocks are cheap on the basis of forward operating earnings,» understand that you are being fed a very thin gruel.

What happens if we extend the «Simple Asset Class ETF Value Strategy» (SACEVS) with a real estate risk premium, derived from the yield on equity Real Estate Investment Trusts (REIT), represented by the FTSE NAREIT Equity REITs equity Real Estate Investment Trusts (REIT), represented by the FTSE NAREIT Equity REITs Equity REITs Index?

Many believe this dynamic can go on, since rates are probably going to remain low, creating a still high «equity risk premium» — the likely return from stocks over bonds.

As many people know, the Defined Risk Strategy is composed of three primary elements: the long, buy - and - hold position in an equity market, the hedge on that long position, and the premium collection trades.

This is since the equity duration is based on a derivative of the dividend discount model that uses long term interest rates plus an equity risk premium, but these models also rely on growth and inflation.

The majority of economists, however, agree that the concept of an equity risk premium is valid: over the long term, markets compensate investors more for taking on the greater risk of investing in stocks.

The equity risk premium is based on the idea of the risk - reward tradeoff.

The equity risk premium is the difference between the return one should earn on stocks and the return earned on safe investments like bonds.

Implied required return on equity, given how stocks were priced on 1/1/14 = 8.00 % (a 5 % equity risk premium on top of a 3 % risk free rate)

The magnitude of the equity risk premium and spread change from a discount to a premium is the biggest since Oct. 2011, and the magnitude is the 8th largest on record with the 5th biggest swing.

(ii) a return to equity risk premiums of old, which were based on the last 100 yrs?

Investors demand a premium on their equity investment return relative to lower risk alternatives because their capital is more jeopardized, which leads to the equity risk premium.

Beta, compared with the equity risk premium, shows the amount of compensation equity investors need for taking on additional risk.

We suggest that investors seeking higher returns consider boosting their overall equity allocation rather than chasing the illusory size premium in an attempt to add risk on the cheap within the existing allocation.

Doing a very rough average, and considering that the NASDAQ was in a boom period for most of the study period, I am comfortable with a reduction in the US equity risk premium over bonds down to 1 - 2 % on average, and over cash to 3 - 4 % on average.

A Review of the Evidence, in which Fernando Duarte and Carlo Rosa argue that stocks are cheap because the «Fed model» — the equity risk premium measured as the difference between the forward operating earnings yield on the S&P 500 and the 10 - year Treasury bond yield — is at a historic high.

Equities on the other hand are held because of an expected risk premium of (say) 6 %.

The reverse mortgage called the Home Equity Conversion Mortgage (HECM) and traditional FHA loans are both federally insured, and require that borrowers pay a mortgage insurance premium in order to decrease risk to lenders if the homeowner defaults on the loan.

Bond Bear, Stock Bull Fortune magazine explained why Greenspan's comments that bond yields are going to rise and stocks are a bargain based on current equity risk premiums makes little sense.

The Global High Quality Dividend Yield (GHQDY) is a diversified, risk - controlled strategy designed to target a yield premium of 75 to 100 basis points relative to yields on diversified global equity indices.

If you are discounting the composite cash flows of a multinational company, the equity risk premium should be a weighted average of the equity risk premiums of the countries that the company operates in, with the weights based on revenues or operating assets.

I doubt we have that many buyers willing to take on «worst of equity and debt risks» at any reasonable yield premium.

Third, there may be more opportunities for revisions in asset allocation based on the changing equity risk premium.

These policies are subject to market risks and they allocate your premium amounts in equity and debt depending on the type of funds you choose ranging from equity, debt and balanced fund depending upon you risk profile.

Rather than purchasing equities outright, the insurance company typically enters into options contracts using some portion of the policy premium, which enables them to pass on the upside gains without the downside losses — but at the cost of an additional counterparty risk.

Market Linked Returns: Unit linked plans offer the opportunity to earn market - linked returns as part of the premiums is invested in market linked funds which invest in different market instruments - debt and equity in varying proportions depending on one's risk appetite.

The premium that you pay is divided into two parts; one goes towards coverage of risk on your life and another part goes towards debt or equity market instruments depending on the option selected.

That assessment, though, is built on the presumption that the forces that push up interest rates have no effect on the other inputs into value - the equity risk premium, earnings growth and cash flows, a dangerous delusion, since these variables are all connected together to a macro economy.