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2025 Dec 25, 10:48am
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2025 Dec 25, 10:48am
stfu says
Yep.
The risk premium for an investment is the return an investor expects to receive above the return of a "risk-free" asset (like U.S. Treasury bonds) as compensation for taking on additional risk. It's a theoretical concept that constantly changes.
One analysis in March 2025 noted that VYM's risk premium was still near a 10-year peak relative to Treasury rates, suggesting an attractive potential return for the inherent risk at that time.
The fund's current SEC yield is approximately 2.42%. The difference between this yield and the current yield of a risk-free asset (e.g., a 10-year Treasury note) can provide a rough, current-market estimate of the yield premium, but this is not the total risk premium (which also includes capital appreciation expectations.)
In my investing lifetime (last 35 years) bonds have never made sense. They are considered "low risk" because they have low volatility. This is straight out of the MBA curriculum where they define risk as volatility when they are calculating their debt to equity ratios. That's not my definition of risk. Risk should be defined as not keeping ahead of the cost of living.
Yep.
The risk premium for an investment is the return an investor expects to receive above the return of a "risk-free" asset (like U.S. Treasury bonds) as compensation for taking on additional risk. It's a theoretical concept that constantly changes.
One analysis in March 2025 noted that VYM's risk premium was still near a 10-year peak relative to Treasury rates, suggesting an attractive potential return for the inherent risk at that time.
The fund's current SEC yield is approximately 2.42%. The difference between this yield and the current yield of a risk-free asset (e.g., a 10-year Treasury note) can provide a rough, current-market estimate of the yield premium, but this is not the total risk premium (which also includes capital appreciation expectations.)
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One year return = 24.38%
If you invested $1 million in the average S&P 500 stock index fund, you'd be smoking fat cigars and doing $243,800 worth of hookers and coke.