Long-Term Stock Returns in Brazil : Volatile Equity Returns for U.S.-Like Investors

This paper tells the history of Brazilian stock market returns since the creation of the Ibovespa (the main Brazilian stock market index). From 1968 to 2019, the arithmetic mean real return of the Brazilian stock market is 21.3% per year. The equity premium is 20.1% per year, with a huge annual standard deviation of 67% . Surprisingly, such numbers are compatible with investors' risk aversions that accommodate the very different U.S. market evidence, exposing that national investors are similar in nature. The equity premium has been higher in Brazil than in the U.S., but the much higher Brazilian volatility discourages heavier investments in stocks