Stocks Plunge When Investors Earn The Equity Risk Premium
Published Friday, December 21, 2018 at: 7:00 AM EST
The plunge in stock prices means it's time to earn the equity risk premium. Here's a reminder of this important fundamental financial concept of investing.
The risk premium is what you get paid for owning a risky asset.
A rubric of modern portfolio theory taught at all major colleges and universities holds that investors get paid extra returns annually for taking risks.
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