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Subject:  Re: Stock vs. Bonds (& Peter Lynch) Date:  9/16/1998  10:38 AM
Author:  galtsgulch Number:  5457 of 97874

TMFPixy wrote:

//For the 10-year period ending 12/31/82 the S&P 500 total return averaged 6.7% per year.//

Sorry to be so think headed here, but are you using "total return" to mean capital gain + distributions? (i.e. If I put $10,000 into the S&P 500, had all capital gain distributions and dividends reinvested, at the end of "the 10-year period ending 12/31/82" I would have: Total = $10,000*(1+0.067)^10 = $19,127, right?)

If so then I thank you for the education! I always thought stocks outperformed bonds in any 10 year period.

I remember discussing a series of articles here (back in February) that claimed the best (defined as maximum returns) retirement asset allocation was a 100% stock portfolio. The articles had some detailed tables comparing the 100% stock strategy with modern portfolio theory's strategy of a mixed basket of stocks and bonds -- starting in 1968 I think. Do you think that Lynch's observation has any relevance to the analysis done in these articles?

----John Power
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