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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: bwtidal who wrote (28851)	2/18/2003 1:24:05 AM
From: energyplay	Respond to of 74559

I don't want to defend the "Stocks for the long Run" thesis in any form, especially having made money in bonds and being net short of stocks. But...1981 was an extreme year. Paul Volker kills inflation and Jimmy Carter's presidency. If inflation had taken longer to kill, the real return would have been lower. What's sad is some people will look at that, buy bonds and wonder what hit them once interest rates start going up next year. One of the other advantages of the argument for bonds which is not mentioned is the survivorship bias of the S&P, DJIA, and othe indexes, which cut losers and add winners each year. If you make the assumption that the U.S. government will survive and pay it's bills (only an iffy assumption in 1983, right after KAL 007 went down, and after Gorbachev's fall)