The Shiller Excess CAPE Yield (ECY), the projected real-return pickup from owning the S&P 500 over 10yr treasuries, now sits firmly in the bottom quartile of the past 50 years.

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A few additional data points worth considering:

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→ The Shiller CAPE ratio is hovering near 40, the second-highest reading in a century. The only higher print came at the peak of the dot-com bubble.

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→ After that bubble burst, the S&P 500 took over 13 years to recover to break-even on an inflation-adjusted basis.

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→ The ECY currently projects roughly 1.3% p.a. of real-return pickup for holding equities over Treasuries — against a 50-year median of 3.1%. To restore that median, the S&P 500 would need to be more than 40% below today's levels.

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→ Berkshire Hathaway is sitting on a record cash pile of nearly $400bn. At the recent annual meeting, Warren Buffett made clear this is not his idea of an attractive investing environment.

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Few investors have a repeatable, multi-decade record of being liquid into panic and deploying into dislocation. Buffett is one of them. When his cash position hits records, history suggests it is worth paying attention.

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So the question stands: against a backdrop of geopolitical fragility and rising sovereign debt loads, are equity investors being paid enough to take the additional risk?

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We don't believe so.

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The relative-value disparity points clearly toward fixed income — and within fixed income, asset-based credit stands out.

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Versus listed equities and traditional corporate debt, it offers higher yield premiums, contractual cash flows, the protection of real collateral, lower duration, orthogonal return streams, and a natural hedge against inflation.

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For investors who have ridden the equity rally, this looks like a sensible moment to lock in profits and reallocate into a strategy built for resilience rather than reliance on continued multiple expansion.

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The real question for your portfolio: is the equity risk premium enough today, or are markets pricing perfection?