Bonds For The Long Run

Dec. 21, 2022 4:38 PM ET38 Comments
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  • Many contend that stocks are the superior investment for investors. This ignores the historical data, and presents unrealistic conclusions for investors.
  • Looking at the historical data, we see the importance of bonds, and how undependable and sporadic the equity risk premium is.
  • Dividends are a far more important component to stock returns than you may think.
  • Today's market favors bonds, as we have the best bond market in 15 years and could be looking at yet another lost decade for stocks.

A close-up of the word bond with a yellow tint

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Wall Street is quick to push the mantra that one should invest in stocks for the long run. But the question of the reliability of the equity risk premium, and just how long the long run is

Fig. 1

Dividends 19000-2000

Triumph of the Optimists: 101 Years of Global Investment Returns, authors Dimson, Marsh, and Staunton (2002)

Dividend Yield Importance

Journal of Portfolio Management


Triumph of the Optimists: 101 Years of Global Investment Returns.

Dividend returns

The Future for Investors, Dr. Jeremy Siegel

Stock Returns

Research Affiliates

Timing is Everything

Lance Roberts on Twitter @LanceRoberts

This article was written by

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Chief Investment Officer, Private Family Office--Providing Evidence-Based Investment Research for those building, managing, and preserving wealth.

Disclosure: I/we have a beneficial long position in the shares of U.S. TREASURY BONDS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article is for informational purposes only and is not an offer to buy or sell any security. It is not intended to be financial advice, and it is not financial advice. Before acting on any information contained herein, be sure to consult your own financial advisor. This article does not constitute tax advice. Every investor should consult their tax advisor or CPA before acting on any information contained herein.

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