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I ran a quick test just now using your suggested stock, PG, versus a comparable-quality triple-AAA bond I own and a five-year back-test period using weekly, dividend-and-split adjusted data from Yahoo. The results are laughable. PG’s internal growth rate was 2.05%/year. The bond produced 5.96%.

Admittedly, I need to run more back-tests across larger data samples. But if that’s the best that conservative stock investing can do, I don’t want any part of it. On a risk-to-risk basis, I can beat the stock returns I might achieve with the bond returns I am, in fact, achieving, because I’m capturing “alpha” (for buying shrewdly when the buying should be done.) In other words, I use the same traditional, value-investing techniques for bonds that good investors use for stocks, and our results will be comparable, because risk is risk, no matter the asset class. That’s not how most investor use bonds, but I’m not most investors.

Where the serious money will come from stocks (or from bonds) is from trading, not investing. But I’m lazy, and buy-and-hold produces good-enough returns.

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