Friday, March 6, 2009

Bonds for the long run?

The fairly well known book by Jeremy Siegel, "Stocks for the long run" presented the wealth effects of buying stocks vs. bonds. The basic idea - stocks outperform bonds in the long run. has an article showing that since the Carter years, this hasn't quite held up if you count recent market movements.

Clearly, this graph is dependent upon the stock index used and also the starting point, which is a little arbitrary.