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Episode 63: Dr. William Bernstein on TIPS, asset allocation, and four deep risks, host Rick Ferri

Bogleheads On Investing Podcast

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Measuring the Equity Risk Premium

This chapter discusses how the equity risk premium is measured using the excess return of the stock market over the risk-free rate. It explores the calculation of the risk-free rate using Treasury bills or fixed-income instruments like TIPS, and mentions that the historical equity risk premium is around 4%. The chapter explores the impact of low yields on asset prices and highlights the importance of considering real returns after adjusting for inflation.

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