Projections for risk premia in the long run edged down in the wake of May’s strong gains for most of the major asset classes. The Global Market Index (GMI)– an unmanaged, market-value weighted mix of all the major asset classes—is expected to generate an annualized 3.9% risk premium (total return less the “risk-free” rate), based on analysis of data through May 2014. The prediction is down from 4.1% in last month’s update.
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