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Strategies & Market Trends : Value of Perfect Information

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From: Q811/19/2008 8:45:58 PM
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With all the talk of deflation with the CPI and PPI is a silver lining around the corner?

Consider this: On average inflation has been around 2.5% for over 100 years. During this time with inflation around 2.5%, equities returned on average 5.22%. Bonds returned a paltry .25%.

Well know with inflation dropping below the 2.5% threshold, equities return increase to almost 8% amounting to approximately a 45% increase over the higher inflationary period. Bonds during this period return on average 4.64%... a staggering 1700% difference!!!!!
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