Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : CNBC -- critique. -- Ignore unavailable to you. Want to Upgrade?

To: R.E.B. who wrote (2171)	1/14/1999 9:56:00 AM
From: Mark Marcellus	Respond to of 17683

<<what a joke; settling for 3.85% plus the rate of inflation each year when the market returns 20%.>> I'm skeptical about inflation indexed bonds also, and I believe that all of one's long term (> 10 years) money should be in the stock market. However, the market does not return 20% annually. In the short term, market returns are completely unpredictable. Maybe returns will average 20% over the next 5 years, or maybe the market will be down 50%. In the long term, history indicates we can expect market returns to average around 11%. For some the certainty offered by those bonds, especially over a shorter time horizon, is worth giving up the possibility of achieving greater returns in the stock market. BTW, my big concern with the inflation indexed bonds would be the possibility of protracted deflation. If that happens, the returns from the stock market probably won't look too good either and the best place to be will be good old vanilla Treasury bonds. You pays your money and you takes your chance. FWIW, Mark