FYI: From 1928 to 2014, stocks earned 4.6% per year more than 10 Year U.S. treasury bonds — 9.6% vs. 5.0%. In finance-speak, this is called the risk premium that stocks earn over bonds.
Academics have tried to explain why the risk premium in stocks exists — they carry more risk, the returns are more erratic and equity owners are at the bottom of the capital structure for repayment. No one really knows the answer. It probably comes down to the fact that equity holders require a higher return on their capital than debt-holders.
Regards,
Ted
http://awealthofcommonsense.com/low-interest-rates-mean-stock-market-returns/
