There is no equity risk premium!

There are several ways of measuring the equity risk premium. The above chart is a simple approach, and it shows the premium is at levels not seen since the dot-com bubble. Other approaches may show the premium slightly higher, but all are signaling that we are are at low levels which suggests that forward returns are likely to be lower.  

This is not saying returns will be negative in the next year nor does it say we will have a crash. It is saying that your long-term allocation to stocks is unlikely to generate returns similar to what were present over the post-COVID period.