Are the Long-term Strategies of Investment in Shares Less Risky?

The equity premium puzzle (EPP) is a phenomenon that describes the anomalously higher historical real returns of stocks over government bonds. The equity premium, which is defined as equity returns minus bond returns, has been approximately 6.4% on average over a 100+ year period in the U.S. The premium is supposed to reflect the relative risk of stocks compared to "risk-free" government bonds, but the puzzle arises because this unexpectedly large percentage implies an unreasonably high level of risk aversion among investors. We investigated 16 emerged countries and our key findings are always positive equity return premium on the long-term horizon and possible negative returns on equities and bonds in the same time although it is super rare and depends on events we could not predict in advance. Also, we conclude that the long-term horizon does not guarantee the non-negative rate of stock returns.