If stocks always produce better results, why own bonds at all?

Every study shows that stocks outperform all other types of investments over the long term – and by a large margin., Wharton Professor Jeremy Siegel writes: “Over long periods of time, the returns on equities not only surpassed those of all other financial assets but were far safer and more predictable than bond returns when inflation was taken into account.”

“The buy-and-hold, 100 per cent stock portfolio is a double-edged sword,” he says. “If you can stick with it through stomach-churning bear market losses, and have a long-term horizon during which the need to liquidate assets will not arise, then strapping yourself into the roller-coaster of an all-stock portfolio may indeed be the optimal solution. Conversely, it would be difficult to identify a worse alternative for those who do not meet these criteria.

As you can see, while stocks were taking a beating, bonds were producing profits in all cases but one . And even that loss was only about one-tenth of the decline in stocks. On average, stocks fell 34.2 per cent during these market crises. Bonds gained 10.9 per cent. You can do this by rebalancing your own portfolio periodically or you could add a position in a tactical asset allocation mutual fund or ETF to your holdings.

Belgique Dernières Nouvelles, Belgique Actualités

Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.

Stock market today: Dow, S&P 500, Nasdaq jump as TSMC outlook prompts chip stock rallyA monthly report on retail sales could provide clues to whether the Fed will go for 'no cut' at its next meeting.
La source: YahooFinanceCA - 🏆 47. / 63 Lire la suite »

Stock market today: Nasdaq leads stock declines while oil spikes on Iran attackUS stocks sold off on Tuesday after Iran fired over 100 ballistic missiles against Israel.
La source: YahooFinanceCA - 🏆 47. / 63 Lire la suite »

Stock market today: Stock rally loses steam as S&P 500, Dow slip from recordsNow that the Fed has started cutting rates, the economy has taken to the fore for investors.
La source: YahooFinanceCA - 🏆 47. / 63 Lire la suite »

Stock market today: S&P 500 clinches fresh record amid GDP data, chip stock gainsA double dose of optimism for the AI trade and for China's stimulus push is buoying the market ahead of Jerome Powell's comments.
La source: YahooFinanceCA - 🏆 47. / 63 Lire la suite »

Traders Need a New Stock Market Playbook for These Rate Cuts(Bloomberg) -- Wall Street traders have a unique challenge in placing bets on the stock market now that the Federal Reserve has started cutting interest...
La source: YahooFinanceCA - 🏆 47. / 63 Lire la suite »