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WCI #239: Contract Negotiation and Student Loans

White Coat Investor Podcast

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Can Bonds Have a Real Return?

If no bonds have an expected real return, let's say, of minus one and a half % after inflation, what is the return on stocks going to be? Well, there's something called an aquity risk premium, which is the return in excess of the risk re rate you get for taking the risk of stocks. I think people'v been chasing yield for a long time, though, yes. But people are really tempted to chase yield when yields are this low water baget wrote about that almost two centuries ago. If we suddenly were to see interest rates like that, your stock portfolios are going to be worth a half to a third of what they're worth right now.

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