Topdown Charts: US equities have outperformed US Treasuries by an average of 15 percentage points annually over the past decade, but warns that stocks appear expensive relative to bonds.
Topdown Charts, an analysis firm, noted that over the past decade, the S&P 500's inflation-adjusted annualized total return was approximately 12%, while U.S. Treasuries yielded about negative 3%. This means U.S. equities outperformed Treasuries by 15 percentage points annually. This gap is three times the historical norm (around 5 percentage points) since the 1880s and represents the largest equity outperformance over Treasuries in U.S. financial history, with the exception of the late 1950s. The firm warned that this record-high gap suggests equities are expensive relative to bonds, and long-term cycles may eventually narrow this advantage.
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