Question

• Right now, is the market risk premium sufficient for you to invest in the stock market?
• How much do you think the stock market will return over and above the Treasury10-year bond rate?
• As an investor, is that an important question to answer before you invest in the stock market?
• Do you think it will return enough to justify the added risk?
• Do you think this premium will vary for different countries or for the same country over different time spans?

Answer 1

No, I don't think that the market risk premium is sufficient for me to invest in the stock market because there is a very low rate of return for a very high level of risk because it is investment at top and the risk of getting stuck at top is very high

I think the stock market will be returning negatively in respect to the treasury bills rate because I am highly sceptical of its performance in the long run as the economy has been damaged but the stocks are not representing that and I believe that once the actual status of economy is discounted in the stock market and the debt of the Federal Reserve are going to be discounted in the stock market, it will be underperforming the 10 year treasuries.

YES, it is always important to know about the rate of return in excess of risk free rate before investing into stock market and I do not think that the return is going to satisfy the added risk because this is almost investment at top as companies has been valued excessively which cannot be sustainable in the long run.

Yes, the premium of investment into the stock market in different countries is different because their risk are different and developing country and developed countries has different type of risk premium due to different risk free rate and growth perspective.