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Don’t Make Me Say I Told You So 61

Stocks, Bonds, Bills and Inflation 2000-2019

$10
Compound annual return
Small stocks 9.3% $5.93
Government bonds 7.1
Large Stocks 6.1
2.1
Treasury bills 1.6
$3.96
$2.98

$1.53
$1.38
$1

0.60
2000 2005 2010 2015

Source: Morningstar, 2020
If you hold equities through down markets as well as up

markets, you will be rewarded handsomely the vast majority
of the time. It’s important to remember that bear markets have
always been followed by recoveries.

I believe that for most people, a philosophy of placing a large
percentage of retirement investments into stocks is probably

the best way to go. I think that this approach will give you the

best chance of accumulating enough wealth so that you don’t
run of out of money in retirement. If you look at the effect that
different returns have on the amount of money you can use for

income, incremental increases in the rate of return make a huge

difference over time.

Chapter 3: You Must Have Growth In Your Portfolio