US stocks - earn an expected return of 8.44%?

[Deleted]

"A solid start to 2024 for the S&P 500, as investor consensus continues to solidify around the economy holding steady and inflation fading. The ERP to start February 2024 stands at 4.50%, and stocks are priced to earn an expected return of 8.44%." - A tweet by Damodaran on Feb 1, 2024

I am not very financially literate but does it mean US stocks (SP500) is expected to return 8.44% (this year or annually?) going forward, (assuming no major change in macro) if we invest today?

That sounds quite decently bullish.

The above is as of Feb 1, 2024.

[uncleharley]

I think he is referring to this year.

[yakers]

I'll take anything positive

[anitya]

He is referring to annually going forward.

Risk free rate (10 yr Treasuries) at 4% + 4.44% equity risk premium = 8.44%

what is his twitter handle?

[yogibearbull]

anitya , it's @aswathdamodaran & here is the post, Twitter LINK

[anitya]

www.investopedia.com/terms/e/equityriskpremium.asp#:~:text=Equity%20risk%20premium%20refers%20to,higher%20risk%20of%20equity%20investing.

I like Prof D's work and have posted here several times what I get from his email subscription.  I am sure his twitter posting is more comprehensive.