Amongst investors it’s widely considered that equities outperform bonds, and therefore reasoned that equities are the superior investment of the two. However, a recent study by Bessembinder entitled ‘Do Stocks Outperform Treasury Bills’ challenges this assumption. Bessembinder’s work shows that on aggregate it’s actually bonds which outperform equities, with the overall outperformance of equity indices driven by outsized gains in a few single names.
Part 2 — Equities as Compounding Machines
Part 2 — Equities as Compounding Machines
Part 2 — Equities as Compounding Machines
Amongst investors it’s widely considered that equities outperform bonds, and therefore reasoned that equities are the superior investment of the two. However, a recent study by Bessembinder entitled ‘Do Stocks Outperform Treasury Bills’ challenges this assumption. Bessembinder’s work shows that on aggregate it’s actually bonds which outperform equities, with the overall outperformance of equity indices driven by outsized gains in a few single names.