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Subject:  Individual Stock vs. Individual Bond performance Date:  6/16/2011  3:30 PM
Author:  ytm Number:  32951 of 36864

I posted this in a different section. Thought someone might want to read it here. Basically it shows a head to head performance comparison over a period of approximately eleven years related to a stock that was mentioned.


I just ran a performance illustration on Microsoft stock. If you would have put $25,000 into their stock early 2000, for the last eleven years or so your annual rate of return comes to barely 1%. This includes a stock split in 2003 plus their divis since 2003 reinvested in MSFT stock.

Your current position value of the stock present day is somewhere in the neighborhood of $27,500.

Now lets say you had put that same $25,000 into a medium term investment quality grade corporate bond with a 5.5% coupon like Boeing or Walmart etc., paid face value for the bond and reinvested the interest annually.

Today this bond position would be worth $45,052.

Bottom line is every stock and/or whatever asset type/class position is unique to that specific point in time. You can not necessarily always be looking in the rear view mirror. I merely posted this information because I am obsessed with the mathematics side of this game. You have to find something that works for your own objectives. There is no universal solution for everyone
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