Stocks offer 'overwhelming' long-term advantages to bonds, says Wharton's Jeremy Siegel. Here's his math to back this up.

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'Certainly, the gap between bonds and stocks has narrowed from what it has been in recent years, but there's still a decided advantage to owning stocks,'...

As inflation-adjusted U.S. bond yields climb to their highest levels in nearly 15 years, some investors are wondering whether owning stocks is still “worth it” over the long haul.

“Certainly the gap between bonds and stocks has narrowed from what it has been in recent years, but there’s still a decided advantage to owning stocks,” Siegel said Monday in a phone interview.MarketWatch: What do ordinary investors misunderstand about the long-term benefits of owning stocks compared with bonds?

If you’re planning a long-term portfolio, a retirement portfolio, a portfolio for a young, working person or child, the advantage in stocks is still overwhelming. There’s still a full month of inflation data, of payroll data, before the September meeting and Powell said they’re going to be data dependent. As a result, his talk may disappoint those who are expecting a big market-moving event.I think he will basically say their work is not yet done. They’re not down to where they need to be. However, they have made a lot of progress, the labor market has slowed but GDP hasn’t because, as I mentioned, there’s been a huge surge in productivity.

 

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