Are Bonds the New Stocks?
Q&A with Robert D. Arnott This prominent financial analyst contends that the ‘cult of equities’ has obscured for many the importance of bonds, which can outperform equities for extended periods of time. By Robert Stowe England April 18, 2009 Highlights of Arnott’s Study and the Q&A Below In an article published in the Journal of Indexes , Rob Arnott reports two key findings from his fresh review of the historical performance data comparing returns on stocks with yields on 20-year Treasuries over the very, very long term, from 1803 to February 2009. The article is titled “Bonds: Why Bother?” and is available on line at this link: http://www.indexuniverse.com/publications/journalofindexes/articles/149-may-june-2009/5710-bonds-why-bother.html The first significant finding is that there are long periods during which bonds outperform stocks: namely, 1803-1871, 1929-1949 and the period from 1968 to February 2009. The second notable finding is that while stocks still outperform bonds ...