Stocks for the Long Run : the Definitive Guide to Financial Market Returns and Long-term Investment Strategies

You have to go back more than 1^1 ⁄ 2 centuries to the period from 1831 through 1861 to find any 30-year period during which the ...

why investors voluntarily purchased 30-year bonds with 3 and 4 percent coupons ignoring a government policy that favored inflati ...

inal rate is between 4 and 5 percent. These projected real returns are lower than the 3^1 ⁄ 2 percent average compound real retu ...

uity return occurred in a period marked by very low real returns on bonds. Since firms finance a large part of their capital inv ...

riority of equities relative to other financial assets was decisive in all countries. The average annual real stock, bond, and b ...

When all the information was analyzed, the Triumph of the Optimists concluded “that the US experience of equities outperforming ...

term stock returns have displayed such stability despite the radical political, economic, and social changes that have impacted ...

connected with transportation: wharves, canals, turnpikes, and bridges. But the important stocks of the early nineteenth century ...

2 Chapter RISK, RETURN, AND PORTFOLIO ALLOCATION Why Stocks Are Less Risky Than Bonds in the Long Run As a matter of fact, what ...

the risk and return on stocks and bonds are not physical constants, like the speed of light or gravitational force, waiting to b ...

It is very significant that stocks, in contrast to bonds or bills, have never delivered to investors a negative real return over ...

ing period increases, the probability that stocks will outperform fixed- income assets increases dramatically. For 10-year horiz ...

stockholder’s return will fall behind the return he or she would get on Treasury bills or bank certificates. The high probabilit ...

STANDARD MEASURES OF RISK The risk—defined as the standard deviation of average real annual re- turns—for stocks, bonds, and bil ...

Theoretically the standard deviation of average annual returns is inversely proportional to the holding period if asset returns ...

The standard deviation of returns for fixed-income assets, on the other hand, does not fall as fast as the random walk theory pr ...

tempts to offset economic downturns with expansionary monetary pol- icy. This inflationary policy accompanies a weak real econom ...

when deflation ruled and government bonds were the only appreciating assets. As a result international investors fled to the U.S ...

curve means increasing the proportion in stocks and correspondingly re- ducing the proportion in bonds. As stocks are added to t ...

RECOMMENDED PORTFOLIO ALLOCATIONS What percentage of an investor’s portfolio should be invested in stocks? The answer can be see ...