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To: Sam who wrote (5763)	3/3/1999 2:42:00 PM
From: Robert Douglas	Read Replies (3) \| Respond to of 9256

Sam, from the linked post: If you invested money in the market in 1929 and I put an equal amount in T-bills it would be 1963 before you "caught up" to me.That's 34 years of risk for the same return I had in bills.In fact by 1966 I would be ahead of you again and it would not be until 1986 before we were even again.That's 57 years. Well, yes and no. A big difference is that the two are taxed differently. Since T-Bills are taxed at a higher rate and every year you lose some to the taxman, the compounding over 34 years would be highly deceptive. In the calculation you would be compounding money that the IRS now has possession of. With stocks the rates are lower and sometimes you can compound for years before giving the taxman his due. I did love the post's observation that the majority of people enter the market after it has gone up. -Robert [EDIT] After thinking about this post and thinking it smelled fishy, I pulled out my Ibbotson and Sinquefield, "Stocks, Bonds, Bills, and Inflation: Historical Returns". The return for common stocks between 1929 and 1963 was 8.7% a year compounded annually. For T-Bills the number is 1.2%. The poster looks like he got some bum information.