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RE: Down goes the Dow

Ghost of Igloi wrote:

OK, smarty let's see your numbers for any time period you like.

I would respectfully suggest that the use of terms like 'smarty' and 'sweetie' is not helpful to any discussion.


Now, since you insisted on me producing numbers after failing to provide anything to back up your claim I do so here.

As I said, this is all a very simple calculation and can be done in public where anyone can check for errors. So, here I provide my source for raw numbers:

As I mentioned earlier I am looking at reasonably broad market indices over as long of a time period as I can get my hands on. In this case you can see by clicking on the link we have a data set from 1928 through 2014 inclusive. Stocks are represented by the S&P 500. Bonds by the 10-year T-Bond.

I look at rolling 20-year periods, the first of which is 1928 - 1947, the last of which is 1995 - 2014. This provides us with 68 such 20-year periods.

Here are some statistics for you:

1) The number of times that a 90% stock - 10% bond portfolio (hereinafter referred to as the 10% bond portfolio) outperformed the 100% stock portfolio is 8. The number of times that the 100% stock portfolio outperformed is 60 (out of 68).

2) The largest performance advantage over any 20-year period for the 10% bond portfolio is 23.4%. That is, the cumulative percentage point advantage was 23.4% (422% total gain vs 398.6 total gain).

3) The largest performance advantage over any 20-year period for the 100% stock portfolio was 450% (2,082.7% total gain vs 1,632.7% total gain).

4) In 43 out of the 68 20-year periods the 100% stock portfolio enjoyed an advantage greater than the greatest advantage enjoyed in any 20-year period by the 10% bond portfolio.


I shall await your admission of error.

More importantly I will hope (perhaps against all odds) that you will now cease and desist your practice of spreading false information on this particular topic.

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