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So far this century, bonds have outperformed stocks. While interest rates are low historically right now, so are stock dividend and EPS numbers. Stocks are just as expensive as bonds, in other words.

In the 20th century, especially when the bond bear market of 1940-80 is factored in, stocks outperformed bonds. But is there any reason why this might reoccur in the 21st century? By way of analogy, US companies produced more cars than any other country in the 20th century, but I don't know if this will be true in the 21st- historical data alone is not enough to convince me. On the other hand, I do expect low fee index funds to continue to outperform high fee funds, not only because they've done so historically but because I understand the reason behind it.

I welcome any thoughts on this. Thanks.

Nick







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