Imagine two people who added $10,000 to their investment accounts on January 1st, every year for the past 15 years.
One of them is risk averse. They put the money into Certificates of Deposits, getting a few percentage points each year, but the principal is insured.
The other is less risk averse; they put money into an S&P500 Index each year.
Who comes out ahead? The answer might surprise you:
Stocks vs Certificates of Deposit (1994 – 2008)
CDs in 2009 yield 1% – 2%, as the market fell and then rally; if the S&P doesn’t perform well for the rest of this year, CDs will have more gains again.
As of March, Bonds had outperformed Stocks from 1968 to 2009 — 40 years
Stocks vs. Bonds (March 28th, 2009)
Used the CDs 6 mo (Annual) data from here:
Used the annual returns (with dividends) from here:
(did each year gain/loss seperate, then added the $10K for the next year)
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.