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Vanguard Total Bond Market ETF Message Board

  • leoislion75 leoislion75 Aug 30, 2011 10:54 PM Flag

    (Investor come in) Helping with historical perspective

    You all need some historical perspective to understand how various asset perform over long-term. (History provides a good basis instead of NO basis coming into investing)

    1900-2011 (101 years): (all nominal return)

    1)Equity (general market S&P composite & Wilshire 5000): Annualized 10.1%

    2)Bonds (longer than 20-years): 4.8%

    3)Bills (short-term): 4.1%

    1&2&3 -> All are dividend/interest reinvested & pre-tax.

    The ONLY reason you may outweigh one over the other is:

    A)You are definitely sure one asset class is VASTLY undervalued vs. the others

    ***If you outweigh B or C over A, I would remind you the following:

    Current Bill&Bond yield is @ historical low (last time was 1940s when yield were FORCED to keep around 2% by the U.S. govt)

    Bonds Return (in 1940s & 1950s):

    1)1940s: Annualized 3.2%
    2)1950s: Annualized exactly 0%

84.24+0.10(+0.12%)Sep 27 8:00 PMEDT