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

Foreword xv

Preface xvii

Acknowledgments xxi

PA RT 1

THE VERDICT OF HISTORY

Chapter 1

Stock and Bond Returns Since 1802 3

“Everybody Ought to Be Rich” 3
Financial Market Returns from 1802 5
The Long-Term Performance of Bonds 7
The End of the Gold Standard and Price Stability 9
Total Real Returns 11
Interpretation of Returns 12
Long-Term Returns 12
Short-Term Returns and Volatility 14
Real Returns on Fixed-Income Assets 14
The Fall in Fixed-Income Returns 15
The Equity Premium 16
Worldwide Equity and Bond Returns: Global Stocks for the Long Run 18
Conclusion: Stocks for the Long Run 20
Appendix 1: Stocks from 1802 to 1870 21
Appendix 2: Arithmetic and Geometric Returns 22

v

CONTENTS

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