Economists famously argued the gap was “too big” to explain with standard models — the equity premium puzzle — which is why it’s still debated today.[1]
It’s hazard pay. Tougher, scarier jobs pay more to get people to show up. Stocks pay a premium to get investors to tolerate the turbulence.
Two cautions: the premium is an average over very long periods, and nobody promises it for your particular decade. It can be thin — or negative — for years.
Where these numbers come from
Finisdom’s long-run backtests and regime splits let you see how this premium showed up — and disappeared — across real history.