Show Us Your Portfolio: Larry Swedroe
Excess Returns
00:00
How to Reduce the Risk of Black Swans
There has to be logical risk-based or behavioral-based reasons for you to believe the premium will persist. I prefer risk-based explanations, because risk can't be arbitraged away. In theory, at least, equity should always have higher expected returns than team bills. But there are limits to arbitrage that prevent sophisticated investors from shorting stocks and driving the prices back.
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