Stocks Remain Your Best Investment for the Long Run
Jul 17th, 2008 | By Floyd Brown | Category: Featured, Financial NewsThis is not the kind of thing you hear often in contrarian investing circles.
According to Jeremey Siegel, a professor of finance in the Wharton School of the University of Pennsylvannia. “Stocks remain your best investment for the long run. Neither bonds nor gold can match stocks if you have an adequate time horizon.”
Gold bugs Bill Bonner and The Mogambo Guru may disagree. But Floyd Brown at InvestmentU.com says “given the bank and mortgage defaults and the depressing results of stocks this summer, Siegel’s message was reassuring and full of optimism.”
Professor Siegel’s findings, which are the product of years of academic research, captivated the audience. Take a look at some returns that caught my eye…
His research proves that over time, stocks are a superior investment to all other asset classes. Over the long term, stocks have returned 6.8% per year after inflation. Whereas gold has returned -0.4% (failing to keep up with inflation) and bonds have only a 1.7% return. After taxes, the outperformance of stocks is even greater.
Source: The “Wizard’s” Favorite Ratio for Evaluating Stocks
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