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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: BDR who wrote (40620)3/20/2001 11:09:07 AM
From: chmang  Read Replies (2) of 54805
 
Totally agree with your words of caution and the need to have have a much broader perspective than the last 10 years.
I remember in the early 80's in Europe having seen CD yields of 11% , inflation 8-9 % so you could end eventually with a negative real yield after taxes.
When we look at the historical returns of bonds and shares, we should always translate them in real money yields (net of inflation) before drawing any conclusion for the next decades.
I don't know about your retirement calculators as they are specific for U.S., but it seems weird to ask people to predict inflation. I personally leave inflation aside in my planning. I assume that state bond yields are 2.5 % net of inflation and I try to estimate what kind of annual premium my shares will give me over bonds on a long period.
Charles
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