27 Nov 2017 Pzena Investment Management Q3 2017 Commentary ( Portfolio )

"By our calculations, the expected return on the S&P 500 is about 6% today. While this is lower than the 20 year average of closer to 8%, it compares well to the height of the internet bubble in early 2000, where the markets' expected return was more like 4%. At that time, interest rates were closer to 6%, thus creating a negative equity risk premium for the first time since 1980. Today, with U.S. Treasury bonds yielding 2.3%, the incremental advantage of stocks versus bonds is fairly normal."