The forward earnings yield on the MSCI World Equity Index (the earnings-price ratio) now stands around 6%, down from 9% just after the global financial crash. That is roughly the same level as during the early 2000’s, when government bonds yielded in aggregate about 4%.
Today’s 6% earnings yield compares to an aggregate bond yield of about 2%. So the equity risk premium that investors receive for taking the additional risk of holding equities is double what it was in the 2000’s.
The chart below shows the equity risk premium globally:
By historical criteria, stocks aren’t particularly expensive vs. bonds.