As with hard sciences like physics or chemistry, finance has commonly held “principles” somewhat akin to laws that help govern how investors value assets. The difference is that finance is not a hard science but, like economics, more of a social science that relies on human behavior and psychology. As a result, even the most widely accepted tenets deserve to be examined and turned on their heads at times to evaluate under what circumstances they actually hold up.
September 30, 2019—The equity risk premium (ERP) refers to the (expected) return of a broad equity index in excess of some fixed income alternative. The ERP plays a critical role for any investor in that it affects savings and spending behavior as well as the all-important allocation decision between equities and bonds.
The Wilmington Trust/M&T Bank family joins the nation in mourning the loss of the 41st President of the United States, George Herbert Walker Bush.President Bush guided the nation through a period of sweeping global change—and is most notably remembered for bringing a peaceful end to the Cold War, marked by the fall of the Berlin Wall.
