Investment Management has
been conducting research into estimating the risk premium of stocks
over long term Treasury rates. The results of this research were
published in The Journal of Portfolio Management (Winter 2003
vol. 29, #2*). The study observes that most research has
overstated the advantages of stocks over bonds. Over long
periods, bonds have actually outperformed stocks. It goes on to explore
the conditions that are found to have likely produced these results.
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Recent speech given by Lacy Hunt, Ph.D.