Only a good understanding of the long-term historical risk and return of various indexes will enable you to know how to allocate indexes in accordance with your own unique Risk Capacity™. In this Step we provide you data on the risk and return characteristics of both size and value subsets of markets around the world. For some indexes, we have data going back to 1926.

Program Overview

Three risk factors documented by Eugene Fama, Kenneth French, and Jim Davis. They identified the 77 year historical annual average returns of these risk factors. These factors are used in a multiple regression analysis to risk adjust returns of other investments and to establish the cost of capital of firms who sell their stock. Remember that a firm's cost of capital is equal to the investor's expected return.

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