Investors are always evaluating whether they are being fairly compensated for the risk they are taking in any investment given the outlook for the economy and markets. But to borrow a line from the famous American baseball coach Yogi Berra, “prediction is very difficult, especially if it’s about the future”.

In the very long run, things seem much easier. The variance around expected returns is smaller and the risk premium earned for taking on a specific risk is easier to judge.