Uploaded January 2026 | Updated September 2026, 1 week ago
In 2025, bad news came in waves, with tariffs, political shocks and economic upheavals accumulating, but in the face of this news, stocks were unbowed. I look back at the year that was, and look at the rollercoaster path that US equities took to deliver a return of 17.72% for the year, a middle of the pack return relative to annual returns in the last 98 years, but one that stands out still because it followed two years (2023 and 2024) of very good returns (greater than 20%). Turning to 2026, I examine at how US stocks are positioned, trading at PE ratios close to historic peaks, and look at the earnings and cash flows stories sustaining high stock prices. I close with an estimation of the implied equity risk premium at the start of 2026, a composite number that includes stock prices, earnings, cash return and treasury rates.
Blog Post: aswathdamodaran.blogspot.com/2026/01/data-update-2-for-2026-equities-get.html
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/DataUpdate2for2026.pdf
Historical returns on stocks, bonds, bills and other assets: https://pages.stern.nyu.edu/~adamodar/pc/datasets/histretSP.xlsx
ERP at start of 2026: https://pages.stern.nyu.edu/~adamodar/pc/implprem/ERPJan26.xlsx
Historical ERP: https://pages.stern.nyu.edu/~adamodar/pc/datasets/histimpl.xlsx
In 2025, bad news came in waves, with tariffs, political shocks and economic upheavals accumulating, but in the face of this news, stocks were unbowed. I look back at the year that was, and look at the rollercoaster path that US equities took to deliver a return of 17.72% for the year, a middle of the pack return relative to annual returns in the last 98 years, but one that stands out still because it followed two years (2023 and 2024) of very good returns (greater than 20%). Turning to 2026, I examine at how US stocks are positioned, trading at PE ratios close to historic peaks, and look at the earnings and cash flows stories sustaining high stock prices. I close with an estimation of the implied equity risk premium at the start of 2026, a composite number that includes stock prices, earnings, cash return and treasury rates.
Blog Post: aswathdamodaran.blogspot.com/2026/01/data-update-2-for-2026-equities-get.html
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/DataUpdate2for2026.pdf
Historical returns on stocks, bonds, bills and other assets: https://pages.stern.nyu.edu/~adamodar/pc/datasets/histretSP.xlsx
ERP at start of 2026: https://pages.stern.nyu.edu/~adamodar/pc/implprem/ERPJan26.xlsx
Historical ERP: https://pages.stern.nyu.edu/~adamodar/pc/datasets/histimpl.xlsx
