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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.85+1.0%3:59 PM EST

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To: RetiredNow who wrote (63227)3/12/2003 8:36:38 PM
From: Stock Farmer  Read Replies (1) of 77400
 
My point mindmeld is that your retirement planning may be aggressive.

7% growth in equity prices would be reasonable if they started at a fair price, grew at 7% per year and thus doubled over the next 10 years. However, if they are over-priced by a factor of two, then every dollar you invest delivers 0% rate of return over the next decade.

Which means if you are 66% stocks and 33% bonds that your bond portfolio has to deliver 21% returns. Which is junkier than junk. If you are 66% bonds and 33% stocks you still need 10.5% returns. Still junk.

You've got lots of junk?

John
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