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| Federal Reserve Bank of Kansas City - Economic Review: How Long Is a… |
home advanced search in free articles only all articles this publication news & society arts & entertainment automotive business & finance computers & technology health & fitnessurl.net. it's free! save it. conventional wisdom tells us that stocks tend to outperform government bonds in the long term. that is, if stocks are held long enough, they are usually better investments have reduced the riskiness of stock investments but not bond investments. further, for most individual investors, feasible holding periods have seldom been long enough to take full advantage of diversify the risks specific to individual stocks is to invest in an index of the stock market. because the focus of this article is to compare the risks of stocks as a whole class relative tonvestors will be willing to hold only bonds. to be attractive to investors, stocks must be cheaper and thus carry higher expected returns. the additional return is often called the equity riskies and thus lower stock prices and returns. government bonds, on the other hand, tend to do better when the economy slows. interest rates tend to be lower in such an environment, boosting returns onscal position is also an important long-term risk for bonds because persistent increases in government budget deficits imply persistently higher future borrowing by the government. everything else
http://www.findarticles.com/p/articles/mi_qa3699/is_200501/ai_n13618045 - 21k
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http://www.findarticles.com/p/articles/mi_qa3699/is_200501/ai_n13618045
2005-12-03 17:14:01
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