The US equity premium puzzle, by Publius

Since records began in 1926, an investor in a value-weighted basket of all US listed stocks has made between 4-8% annual return in excess of the risk-free return on US government Treasury Bills. At present, despite the recent downturn, to the end of 2021, that number stands at the higher end at 8%. If you start the record in 1946 instead of 1926 it is s…