Wednesday, May 27, 2009

Bonds beat stocks: Does equity premium still exist?

Bonds beat stocks in the last 40 years, from Feb. 1969 to Feb. 2009. If you sold stocks right before the dot com bubble, your return on bonds is even greater: almost 4 times of stock returns.

Watch this nice debate on investing in stocks vs. bonds between Robert Arnott and Jeremy Siegel.

Arnott is the guru in quant investing, and he also sits on the editorial board of Financial Analyst Journal and Journal of Portfolio Management; Siegel is a finance professor at Wharton School, University of Pennsylvania.