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I've done a similar comparison in this forum as his of the returns from stocks vs bonds from that same March 2009 bottom, and bonds were competitive with stocks on an absolute basis. On a risk-adjusted basis, bonds beat the crap out of stocks, of course. So, not withstanding the immense respect I have for Jim and his work, back-tested results can't be spent at the grocery store. Sometime, when you're truly bored, Google "investor under-performance."

How is that the Standard & Poor’s 500 index can turn in a return of 11.80% for the period 1987-2006 and yet individual stock mutual fund investors earned a dismal 4.30%? This is not an anomaly. Historical data indicates that individual investors consistently and significantly underperform the returns of the overall market.

Assume the study on which that result was based was methodological sound. Then apply the same ratio of under-performance to a benchmark such as Lehman's Aggregate Bond Index. (or whatever it has been re-named to). Stocks or bonds or whatever, it doesn't matter what the retrospective studies suggest was available to investors. The vast majority, like 95% of them, are unable to achieve even a reasonable fraction of it. Always, my point in this forum has been this:

"Very decent bonds can be made from bonds. Much better money can be made from other things. So, pick your game, and stop indulging in woulda/coulda/shoulda."

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